THE POWER
OF TEAMWORK
Annual Report
2021/2022
The theme of this year’s annual
report is adding value by teamwork.
Teamwork is one of our core
values and a fundamental driver
approach our markets, how we
work together internally across
Holland Colours, and it provides
the foundation for a co-design-,
collaboration-based, outside-in
approach to customer innovation.
Teamwork is a mindset, a process
and a goal.
Throughout this report, we spotlight
the three key areas for teamwork
at Holland Colours: marketplace,
internally and with clients.
Internal teamwork
78
Teamwork and our markets
72
Teamwork and our client
57
In ve editorials we highlight the three
key areas for teamwork at Holland
Colours: marketplace, internal
teamwork and collaboration and
co-design with clients and distributors.
Teamwork and our client
21
APPROACHING THE MARKET
AS ONE TEAM
Teamwork and our client
6
UNDERSTANDING THE PROCESS
AS WELL AS THE PRODUCT
WORKING TOGETHER TO OPTIMIZE
PRODUCT, COMMERCIAL AND
OPERATIONAL PERFORMANCE
WORKING TOGETHER
INTERNALLY AND EXTERNALLY
ALL FOR ONE AND
ONE FOR ALL
CONTENTS
SpecialsIntroduction by the CEO 5
About Holland Colours 8
Our Heritage 9
Our Products 10
Our Solutions 11
Our Markets / Our Mission 12
Our Core Values 13
Employee participation: the togetherness you
get when everyone is a co-owner 15
Report of the Board of Management 16
Board of Management 17
Strategic Update 19
Financial Key Figures 23
Product Innovation 29
Corporate Social Responsibility 29
Risk Management 30
Corporate Social Responsibility 42
Corporate Governance 52
Report of the Supervisory Board 59
Remuneration Report 66
Employee Participation 70
Five-Year Summary 74
Investor Relations 75
Financial Statements 80
Other Information 121
Independent Auditor’s Report 122
Contact 136
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSABOUT
DEAR SHAREHOLDERS, EMPLOYEES, CLIENTS AND BUSINESS PARTNERS,
The second year of COVID-19 again underlined the value of teamwork and
reminded us that, in an increasingly complex and challenging world, our ability to
work together will continue to be an advantage. We looked after each other and
jumped in to help out when this was needed to overcome challenges and
roadblocks. We organized ourselves to both support our clients and each other.
I am immensely proud of what I have seen.
A GOOD RESULT
We continued to invest in growth and process improvements to safeguard our
raw material prices. We maintained our service and kept our clients supplied.
with the previous year, the ROS (Return on Sales) increased to € 13.6 million,
BUILDING A STRONGER ORGANIZATION
Over the last year, we have taken a number of steps to strengthen our organization.
We have reviewed our business risks and developed a Risk Matrix that maps our
risks and scores them on how important they are to us. Further, following the
incident described in the paragraph ‘Risk-related events 2021/2022’ in the Risk
Management section, we reviewed and emphasized the importance of our Code
of Conduct.
INTRODUCTION BY THE CEO
We will also introduce an Ethical Compass to help our employees take moral considerations
into account around risk-sensitive integrity issues. Typical themes will include fraud, bribery
and corruption, psychological and physical safety and cybersecurity. Finally in 2021/2022, we
established a new baseline for measuring our CO
2
emission going forward, and we continue
our program of process and IT improvements.
GO FAR TOGETHER
As we move out of the global pandemic phase of COVID-19, teamwork will continue to be
as important to our success as ever. We have a lot to do together. This includes rolling out
our people development program, called Better Together Dialogues, company-wide,
with our operational process improvements. Using our new communication tools, we want
to build collaboration between groups and teams across the organization
and support cross-border thinking. And we need to work on
implementing our sustainability vision.
Despite the ongoing economic, political and other instabilities,
we should know by now that with teamwork in our DNA, we can
do and achieve anything. There’s a good African proverb that
applies here: If you want to go fast, go alone; but if you want
to go far, go together.
Thank you to all our employees and stakeholders for
and so working on the success of Holland Colours.
Coen Vinke
CEO
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TEAMWORK AND OUR CLIENT
OTTO Chemie stands for uncompromising quality,
the highest level of expertise and innovative
solutions for sealing, bonding, casting and coating.
Holland Colours supports the company with the
rst of these – sealing.
THE PROCESS
AS WELL AS THE
PRODUCT
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OTTO’s Christian von Malotki and Nikolaus Auer work closely with
Holland Colours in a relationship whose roots go back to the
mid-1990s. The way we work together has evolved from supplier
and customer to team players.
HIGH-END DEMANDS
Holland Colours makes color-matched liquid pastes that OTTO
operates at the top of the market. “We have a couple of hundred
standard colors, and we make tailormade colors based on
samples from the client,” says Mr. Auer.
It is a huge market in which architects, builders and designers are
always looking for something fresh and in which the quality of the
color match is crucial. Recognizing this, OTTO switched in 2020 to
very high quality color match. “To do this needed more knowledge
about color pastes from our side, and more knowledge about our
processes from the HCA side. So we started having more frequent
technical meetings,” explains Mr. von Malotki.
UNDERSTANDING PRODUCTION NEEDS
These technical meetings – three to four a year, sometimes more,
at both OTTO and Holland Colours – are an opportunity to go
deeper into possible issues and to develop the best custom
product. Mr. Auer: “Holland Colours supplies us with really
well into our processes. This is very important, and Holland
Mr. von Malotki adds: “The understanding HCA has of the
demands on our production side and the understanding of the
HCA technical department is very good. If we have a problem,
have to explain the problem once. HCA’s understanding is on
a very high level, which makes our partnership very good.”
MUTUAL BENEFITS
From the Holland Colours perspective, working with a high-end
client like OTTO pushes us to go further because it sets the bar for
us even higher. The result is extensive collaboration from which
helping ourselves and our other customers.
“We have a very intensive cooperation,” says Mr. Auer. “I would say
it goes beyond the usual supplier-customer relationship because
we work very closely on innovation, new projects and processes.
This is a key reason for us to work with Holland Colours. Both
sides really understand pastes. Holland Colours understands color
pastes and we understand sealant pastes. We learn from each
products better. We come together with our knowledge.”
The result is a strong sense of feeling supported: “We notice a very
with complications,” says Mr. Auer.
NOT ‘A’ SUPPLIER BUT ‘THE’ PARTNER
The impact of the relationship between OTTO and Holland Colours
rests on mutual trust and close teamwork. The contact between
us is always open, always friendly, always constructive and focused
on quality. As a company, we want to be part of the growth of
OTTO, and the only way to do that is not to be ‘a’ supplier to
OTTO Chemie, but to be ‘the’ partner to OTTO Chemie. And that
involves spending time with each other and learning together.
“We learn from
each other. We use
methods to
understand our
products better.
We come together
with our knowledge”
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ABOUT HOLLAND COLOURS
43
YEARS
of color
formulation
experience
One global team
of over
400
EMPLOYEES
SINCE
1979
NETWORK OF
100
suppliers,
distributors
and agents
As a company, we set out to deliver customer
peace of mind through superior product
performance, world-leading product stewardship,
and outstanding technical service. Our experts
customers, develop solutions to support recycling,
and actively contribute to creating a more
sustainable industry overall.
GLOBAL SUPPLIER
of plastic colorants
and additives
2
BILLION KG
of plastic products
colored by
Holland Colours
each year
OUR PROFILE
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSABOUT
More than 40 years ago, the founders of Holland Colours set to work in an
old paper factory in Apeldoorn, the Netherlands. A small but ambitious
team, they had an idea that would ultimately disrupt the world of colors –
and earn them the description ‘pioneers.’
Today, we are one global team of over 400 colleagues with dierent
experiences and from various backgrounds. But we all share the same core
values, passion for color, commitment to our customers and pride in our
company.
Holland
Colours
NV
Apeldoorn,
the Netherlands
Surabaya,
Indonesia
Shanghai,
China
Richmond, Indiana
United States
Szolnok,
Hungary
Toronto,
Canada
Tultitlán,
Mexico
1979
1990
2022
1990
1992
1995
Holland Colours Asia
Holland Colours Americas
Holland Colours EMEIA
Gillingham,
United Kingdom
Jakarta
Sales
Production/Sales
Representative Oce
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HOLCOBATCH
®
Microbeads and an
eco-friendly carrier,
with a low melting point
and support for
ultra-low dosing.
Holcobatch is typically
used for light color
applications and
delivers the highest
coloring homogeneity.
Use for transparent
applications.
HOLCOLEX
This liquid colorant
based on water and
glycol is designed for
use with waterborne
systems. Use for
waterborne paints and
coatings, adhesives,
liquid soaps, windshield
wash and antifreeze.
HOLCOPRILL
Cylindrical granulates,
based on a natural
carrier and showing
a low melting point.
Holcoprill is highly
concentrated and is
designed for use at
high dosing levels.
Use for transparent
and opaque
applications.
HOLCOSIL
Liquid colorants for
silicone sealants,
comprising three
applications covering
building and construction,
injection molding
silicone rubbers and
extrusion and hot press
molding of silicone
rubber.
HOLCOPEARL
®
Round granulates,
based on a polymeric
carrier and suitable for
low dosing. Holcopearl
is a great colorant for
and PET. Use for
transparent and highly
opaque applications.
A recent development
is Holcopearl 'micro'.
HOLCOMER
A plastic packaging
additive that protects
dairy products from
The Holcomer family
provides superior
opacity for UHT milk
packaging. We also
2
versions.
OUR PRODUCTS
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSABOUT
TINTMASK
Making recycled PET
more re-usable
TASTEGUARD
Protecting the taste
of premium water
FASTHEAT
Optimal energy
usage
SORT
Enhancing the
recyclability
of your product
HOLCOBATCH®
CLASSIC
Less energy during
processing
MARKIT
Color solutions for
laser marking
NATURAL
COLLECTION
Made from renewable
resources
HOLCOMER
THERMOSTRETCH
Low TiO
2
concept for
better recyclability
How we contribute to a sustainable industry
OUR SOLUTIONS
Plastics are essential
Strong, lightweight and moldable, plastics are used in thousands
of products that add comfort, convenience and safety to our daily
lives. Plastic helps to prevent food waste with excellent sealing
and enhanced durability and is widely used instead of wood by
the building & construction industry.
Adding color to plastic and
coatings creates emotion,
aects behavior, aids
identication and supports
safety, depending on the
purpose and application.
Together with our
customers, we co-design
sustainable colorants and
additives that are ecient,
eective and esthetic.
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Building & construction
building & construction industry. Today, our presence in that industry covers a
wide range of products and applications where good dispersion is a key factor.
Packaging
We entered the packaging market later, but today it is a fast-growing part of our
business and another showcase for our expertise. There are various trends at
play in this market. These include thinner-wall bottles, improved food safety and a
growing interest in bio-based and recyclable packaging solutions. We partner with
small, medium and large customers to produce packaging for water, carbonated
soft drinks, fruit juices, dairy, beer, wine, detergents, pharmaceutical and personal
care products. With our wide market experience and strong technology
knowledge base, Holland Colours is well-equipped to support the
evolution of this market going forward.
Coatings & sealants
The third arm of our business is the coatings & sealants
market. This is an important part of our business
portfolio, and this will continue to be so in the future.
We provide solvent and water-based product solutions
to a wide range of customers and applications.
OUR MARKETS
OUR MISSION
Our mission is two-fold:
TO BE
RECOGNIZED AS A
CONTRIBUTOR TO
THE DEVELOPMENT
OF A SUSTAINABLE
INDUSTRY
TO BE OUR
CUSTOMERS’
CO-DESIGNER
OF COLOR AND
FUNCTIONAL
SOLUTIONS
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSCSR FIVE-YEAR SUMMARY & INVESTOR RELATIONSEMPLOYEE PARTICIPATIONABOUT
FRAMEWORK FOR SUCCESS
Our ve core values underpin everything we do as a company. They are part of
our DNA and determine how we behave and what we are like as people and as an
organization. The values are based on the insight that as the market for colorants
becomes more competitive, and good products become the rule rather than the
exception, successful companies will need to nd additional ways to dierentiate
themselves.
Pro-activeness
We make things happen
instead of waiting for
them to happen to us.
Responsibility
At Holland Colours, we
are committed to our
company, our
colleagues, our society
and our environment.
Teamwork
The theme of this year’s annual report
is adding value by teamwork, which is
one our ve core values. We work
together to achieve one common goal.
For us this means:
INTERNAL
I support you and you support me to achieve
our personal and common business goals. We
help each other to learn new things and to
take the business forward. This helps us to
innovate across our markets, run our business
better and to push our sustainability agenda.
EXTERNAL
We work outside in. We team up early with
clients, suppliers and others in the value chain
so we can share our ideas and work-in-
progress. This enables us to commercialize
faster, build a stronger business case for our
clients and ourselves, to co-design custom-
made and innovative solutions, to deliver
world-leading product stewardship support
and to provide outstanding service.
Competence
We have the skills
and expertise to do
things well.
Accountability
We can be trusted that
we take responsibility
for what we do (and do
not do).
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OUR DIFFERENTIATORS
We develop existing
and new customer
relationships into
design partnerships.
Our employees are
co-owners of the
company and we are
proud to provide the
highest levels of service
to our customers.
We continuously build
our competence and
strengthen our
innovation capabilities.
We do not compromise
on regulatory compliance,
and we maintain the
highest quality standards.
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INTRODUCTION BY THE CEO
FIVE-YEAR SUMMARY & INVESTOR RELATIONSEMPLOYEE PARTICIPATIONREMUNERATION REPORT FINANCIAL STATEMENTSABOUT
Plenty of companies oer their employees shares in the business. Typically,
it’s seen as an employee benet: a chance to share in the prots. We don’t
just do that at Holland Colours. We go further. Here’s what that means to us.
It’s true that every permanent employee gets a free share in Holland Pigments, the
investment company that holds a controlling stake in Holland Colours. And it’s
shares. And that every employee can buy more shares in Holland
Because when you receive a share in our business, you also
become a co-owner with a voice in a unique workplace culture
based on shared values, togetherness and solidarity with each
other. (You can read more about the practical working of
employee participation in our story on page 70.)
EMPLOYEE PARTICIPATION DRIVES OUR SUCCESS
As a company, we absolutely believe that employee participation
is essential to our success. This belief goes back to 1979, when
our founders, having experienced what it was like to work for an
organization that placed its employees second, decided to set up
their own business. In building a company that would be innovative,
client-focused and responsible, they believed that every employee should
be a co-owner. They felt it was the right thing to do, a better way to run a business,
and the key to ensuring the independence and continuity of Holland Colours.
Today employee co-ownership is based on three principles:
1. Everyone participates via employee shareholding for both social and business reasons.
3. People and our impact on them is central, both inside and outside the company.
These principles are in line with our core values (Accountability, Competence,
Pro-Activeness, Teamwork and Responsibility) and shape what it feels like to work
at Holland Colours in all kinds of ways. This includes recognizing and rewarding everyone’s
contribution to our success and building engagement. It includes viewing entrepreneurship
as fun and something to be encouraged. It also includes recognizing that being human
in our dealings with each other builds loyalty and the willingness to go the
extra mile.
A CULTURE BASED ON CONNECTION, COLLABORATION
AND SUSTAINABILITY
ownership model that is uniquely in tune with today’s world
in which people are increasingly seeking connection,
togetherness, responsibility and sustainability in their work.
In surveys and discussions, formal and informal, colleagues
tell us they feel proud to work for Holland Colours and that
doing so gives them a sense of purpose. They love that
everyone is included, that everyone’s ideas are taken
seriously and that everyone can say what they think.
This in turn supports the independence and continuity of the
company and enables us to continue to make the right – balanced –
sustainable organization, to lead the way in driving innovation, to prioritize
our clients’ interests and to meet their needs with innovative sustainable solutions.
Thanks to employee participation, Holland Colours is a great place to do great things.
EMPLOYEE PARTICIPATION
The togetherness you get when everyone is a co-owner
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REPORT OF
THE BOARD OF
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CFO ad interim
1962, Dutch
Joined Holland Colours NV
January 7, 2022
Eelco van Hamersveld
CTO
1969, Dutch
Joined Holland Colours NV
December 1, 2017
Appointment to position
Coen Vinke
CEO
1963, Dutch
Joined Holland Colours NV
Appointment to position
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A STRONG FINANCIAL YEAR
Despite the continuing challenge of COVID-19 to people and economies around the world,
struggled with the same problems as other manufacturing companies – logistics and
supply chain issues; the rising price of many raw materials; increasing energy costs – our
people continued to show their commitment to doing what needed to be done to deliver
for our clients and justify the trust they place in us.
Overall, our focus on investing in our future and protecting our margins, along with our
geographic, product and market mix, enabled us to manage our business successfully.
Even though travel and client contact remained at arm’s length, and despite continuing
to work in ‘bubbles’ or from home, we continued to serve our clients well.
A lot of this was due to teamwork, which is the theme of this year’s Annual Report and
which you can read more about elsewhere. In this section of the Annual Report, we look
we faced and highlight the steps we took and are taking to secure our growth ambitions
over the longer term.
LIVING WITH COVID-19
Last year was the second year of COVID-19. Unfortunately, things did not return to normal.
The good news was that we felt we could cope with the situation and that the organization
teams, working from home, hygiene measures – from the previous year, and those worked
well. Even so, a certain mental fatigue started to set it in. There was a lot of pressure on our
systems and on our people. Both the Board of Management and our leadership teams in the
in this kind of situation. There was some frustration, which we understand. At the same time,
we saw a lot of camaraderie and a continued willingness to help each other. That sense of
togetherness is something we want to build on going forward.
COVID-19 continued to make it hard for us to interact with clients, and we saw that
most customers were primarily focused on maintaining production and meeting demand.
They had little time or desire to think about what is new or next. This had the knock-on
as a driver for their business growth. However, the long term trend is clear, and we will
continue to work on claiming a strong position in sustainability both in the way we work
and through the products we develop for the market. Sustainability is integral to our
growth strategy and represents a major opportunity and a challenge for Holland Colours.
MAINTAINING SUPPLIES AND MARGINS
our clients supplied. We have dual sources for most products and, as a ‘recipe’ business,
time and intensive collaboration with the client and internally. That adds pressure. And
with the shortages and rising prices of raw materials, we were forced to pass on price
increases, which is not something we found easy to do. We protected our margins and
and as a hedge against future increases.
OPPORTUNITIES
INTRODUCTION
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSMANAGEMENT BOARD REPORT
RESPONDING TO THE SITUATION IN UKRAINE
condemned the violence and its impact on the people of Ukraine. We also decided to halt
all market and business development in Russia and Belarus, but to continue to supply
existing clients in line with EU sanctions. We continue to monitor the situation closely and
will follow the applicable international laws and regulations regarding sanctions.
GROWING TOGETHER 2023
Our Growing Together 2023
full year of COVID-19, we suspended its implementation while we got a clearer idea of the
pandemic’s impact on our business. This decision was later reversed and so we will
The pause in 2020/2021 does however mean that implementation of our current strategy
is running slightly behind our original plan. That said, the Growing Together 2023 strategy
was always intended to continue beyond 2023, becoming a continuous improvement
program. In that sense, the delay is an issue of timing rather than deadlines, and the
main two elements of Growing Together 2023 – growth and excellence – will continue
beyond 2023.
Apart from safety
and innovation
we achieved our
strategic goals
and overall
objectives for
2021/2022. For
more information
about safety, see
the section on
Corporate Social
Responsibility.
For information
about innovation,
see Product
Innovation
on page 29.
Strategy
2023
Our strategic goals:
• Protecting and extending global market
positions in packaging
• Protecting and extending global market
positions in building & construction
• Extending market positions in
coatings & sealants, primarily in EMEIA
Our overall objectives:
• Zero accidents
• Continued revenue growth
•
•
•
•
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DELIVERING GROWTH
growth goals for packaging, building & construction and coatings & sealants in 2021/2022.
See the next section, Financial Key Figures, for more information. Despite the challenge of
not been able to visit clients, we still succeeded in gaining share at key clients and
acquiring new customers. And general market demand in our strategic business segments
– especially in North America and EMEIA – was strong and supported the revenue growth.
DELIVERING EXCELLENCE
On the excellence front, along with aiming for zero accidents (see the Corporate Social
Responsibility section of this report for more information), our focus is on core business
processes. The aim is to optimize our innovation, commercial, operational and people
This also includes updating our IT infrastructure and data management systems.
Innovation
working, Holcopearl for PVC in Asia. More will follow. Overall, we have shifted to a
transparent setup in which everyone can see what current and potential projects we
And just as importantly, other people can now share their innovation ideas as well and
know that the process will ensure they are taken seriously.
Commercial
With the innovation project well underway, we began working on our commercial
processes – Lead to Cash. We have completed the discovery and development phases and
have begun implementing improvements. We are supplementing good intuition with data
and analysis because, as we grow bigger, it becomes harder to oversee everything that is
going on. The result of these initiatives will be to sharpen our client service proposition.
We are bringing more structure to our business consolidation and acquisition processes.
clear KPIs, and we have a new CRM package on order. All these steps will help to drive
customer satisfaction and revenue growth.
Operational
We will begin work on the third excellence project – the Source-to-Ship operational
process improvement – in 2022/2023.
People
2019. Following a small pilot with management in 2019/2020, last year we selected,
of the project. This begins in 2022/2023.
The goal with the Better Together Dialogues is to support a personal discussion about
each employee’s opportunities and challenges, and to learn from each other. This will
enable us to make the best possible use of the ambitions and talents of all our people
in achieving our strategy.
is excellent, and on the strategy front, our people overwhelmingly said they understood
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSMANAGEMENT BOARD REPORT
TEAMWORK AND OUR CLIENT
Alex Xiong, owner of Moyan, set up his colorant
distribution company in Shanghai in 2016
specically to work with Holland Colours. Mr. Xiong
saw that the Chinese market for milk packaging was
shifting from cartons to PET. High-end brands in
particular were looking to dierentiate themselves,
and PET bottles oered a way to stand out in
Chinese stores. Holland Colours, too, had been
looking to enter the Chinese dairy market with our
Holcomer light barrier products. When a mutual
contact introduced us to each other, we saw an
opportunity for both of us.
THE MARKET
AS ONE TEAM
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Mr. Xiong already knew Holland Colours and felt that our
market for PET packaging. Key in his eyes was that Holland Colours
is a global company and a leader in light barrier technology for
PET. A light barrier helps to protect whatever is inside the bottle
especially important for plastic milk bottles. Ever since the
been a hot topic in the Chinese dairy industry. Regulations are
now tight and dairy producers are very careful when developing
new products and packaging. In this context, global companies are
BEYOND A TRUST-BASED RELATIONSHIP
“HCA was the obvious choice as it was one of the few companies
operating in this high-end niche market,” Mr. Xiong explains. “It is
also a global company. It is an issue of trust and HCA is a leading
partner with a global reputation.”
Trust is central to his relationship with Holland Colours, Mr. Xiong
says: “The relationship is more than that of a supplier and client.
Even more than a partner, because we develop the whole market
and win business together. We treat each other with respect, trust,
and go to the client as one team. The advantage for me is that it
helps to convince the client if HCA comes too. It is teamwork and I
am very proud of this cooperation.” HCA provides technology
support and provides the dairy industry with insights on
performance improvement opportunities in terms of process
optimization and quality enhancement. This partnership is positive
for both.
SIMPLE STRUCTURE, STABLE TEAM
Another key reason for the strong teamwork is the stability of the
team on the Holland Colours side. “HCA is global but has a simple
organizational structure. It is simple to deal with,” says Mr. Xiong,
who describes his contacts within the company as friends. “The
same people every time, unlike other companies. I also like how
HCA does business with respect for the business partner, no
matter how big you are. I am relatively small compared with the
multinational distributors. Other companies would tend to treat
me as a small supplier and with less respect.”
Of course, as well as our successes together as a team, we also
have challenges. “When companies in China want something, they
want it tomorrow, or today. It is complicated, because clients in
China want to work with a global partner, but they also want the
speed of a local suppler, and HCA can struggle with this,” he says.
“We have to go to Indonesia or Europe for help, and that takes
situations.
MORE JOINT DEVELOPMENT
with the current situation, but also I want to do more joint
development for other applications. I want us to expand beyond
Holcomer and so I hope for more focus from HCA on China.”
Clearly, the partnership is solid. As a distributor and importer,
Moyan provides the logistical support to its dairy clients while
Holland Colours takes care of the technology. Mr. Xiong: “The
COVID-19 pandemic showed our relationship is strong enough
that we have continued to work well together even when we
can’t meet face to face.”
“We are developing
the PET market
and winning
business together.
We treat each
other with respect,
trust and go to the
client as one team”
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FINANCIAL STATEMENTSMANAGEMENT BOARD REPORTABOUT
2020/20212021/2022
Revenue
In million euros
15.1%
96.0
110.5
2020/20212021/2022
Operating Result
In million euros
9.7%
12.4
13.6
2021/2022
2020/2021
2021/2022
2020/2021
2021/2022
2020/2021
2021/2022
2020/2021
2021/2022
2020/2021
2021/2022
2020/2021
Return on Sales Return on Investment
Earnings per Share Innovation Index
Solvency
12.3% 34.2%
€11.83 7.9%
23.5% 72.5%
12.9% 32.6%
€11.00 12.9%
20.4% 73.6%
2020/20212021/2022
Net Result
In million euros
6.3%
9.6
10.2
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FINANCIAL PERFORMANCE
2021/2022 2020/2021 Change
Revenue 110.5 96.0
Operating result 13.6
Net result 10.2 9.6
previous year (€ 96.0 million). This included a positive impact (€ 0.25 million) arising from
the translation from USD to EUR.
prices within all focus segments were higher compared to the previous year. Revenue in
volumes and higher average sales prices.
previous year. This decrease was mainly due to increasing raw material prices.
year, primarily due to increased labor costs. In addition, travel, consultancy and software
costs were also higher than the previous year.
because of the impact last year of a non-recurring tax exempt income in the US. After
revaluing deferred tax assets in line with the adjusted tax regime in the Netherlands and
the ‘innovation box’ incentive program, the ETR was below the legally applicable rate in
substantiation of this.
year (€ 11.00 per share).
Developments by division
EMEIA
The EMEIA division registered a strong performance, and all segments were up on the
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EMEIA in EUR millions Americas in USD millions Asia in USD millions
2021/2022 2020/2021 2021/2022 2020/2021 2021/2022 2020/2021
Revenue third-party 37.9 16.6 17.2
Operating result 3.7 2.0 3.9
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Building & construction and coatings & sealants
The building & construction market was especially strong, resulting in solid demand for our
Holcobatch, Holcoprill and Holcopearl products. The sealants market, too, was also very
strong compared with the previous year, with volumes and value both up.
Packaging
In the packaging market we, like the whole of the industry, felt the impact of new EU food
contact legislation – the 15
th
contact recipes. The 15
th
Amendment has implications for the formulation of our product
that we are currently working to solve. Without this, our packaging business in the EMEIA
division would have had an even better year.
Regional developments
development in Russia and Belarus because of the situation in Ukraine. We decided
that we are willing to continue supply to existing clients in those countries in line with
EU sanctions. We continue to monitor the situation closely and will follow all EU sanction
rules if and as they evolve.
AMERICAS
Building & construction
leading position in this market in the US and Canada is based on true partnership with
large client groups. They value our service, and we collaborate intensively in new product
development. Unfortunately, there was little development time available last year due to
the very high overall demand. Machine availability for testing was limited and some of our
co-development projects slowed considerably as a result. On the positive side, our clients
were extremely busy, resulting in high demand for our products.
Packaging
We also saw strong demand in the packaging market, and dairy in particular. This was
driven by the introduction of new long-life energy drinks that use packaging made with
Holcomer. Markets in Mexico and South America, also mainly packaging, were more or less
ISO certication
Our site in Richmond, Indiana, in the USA, became ISO 9001:2015 registered in 2021/2022,
and joins all our other manufacturing sites in holding this registration.
ASIA
USD 17.2 million to USD 16.6 million. The overall gross margin percentage decreased from
Our Asia division saw slightly stronger results in our home market of Indonesia. Packaging
peak. However, we remain the market leader in UHT dairy packaging in China. Our Asian
export markets were largely stagnant due to COVID-19, while continuing restrictions on
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Non-compliant payments
One important event was a report by the management of the Asia division of potentially
irregular payments to employees of clients. For more details, see the paragraph on
‘Risk-related events 2021/2022’ in the Risk Management section,’ and the Audit Committee
section in the Report of the Supervisory Board.
First result of innovation process
beyond the key client and worked with marketing on a communications plan. Overall, it
was a great example of teamwork. It also underlines the opportunities we have to expand
our traditional focus from meeting single client needs to meeting those of the wider
market.
Representative Oce in China
explore new niche segments in China.
INVESTMENTS
Holland Colours made a number of investments in our divisions in 2021/2022 to improve
We would like to highlight the following ones in particular:
New production equipment for EMEIA
In the EMEIA division, we approved an investment of € 5.1 million to install new production
technology with automatic feeding and a packaging line. The new line will further increase
production capacity in response to market demand for Holcopearl, both colored and
white. The new line, in Apeldoorn, will support faster production. It will also reduce the
need for manual handling thanks to its automated packaging module and integrated raw
Also last year, we commissioned a replacement capacity for Apeldoorn and we invested in
modernizing production equipment at our plant in Szolnok.
Scaling up Holcopearl in Americas
In the Americas division, an investment in specialized equipment to make Holcopearl at
manufacturing scale was completed and production begun. Previously, we only produced
this at laboratory scale. Holcopearl’s dark colors create new opportunities for us in the
North American building & construction markets.
Production and environmental investments in Asia
In the Asia division, the additional equipment we purchased in 2020/2021 was set up and
is now coming into operation at our plant in Surabaya. We also began to invest in further
tightening our environmental compliance there. And in response to the rising water levels
Overall, we invested € 3.3 million in 2021/2022.
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CASH FLOW
inventories as a result of building up raw material stocks and increasing raw material
prices. There were no changes in the company’s funding. Except for the liabilities related
to IFRS 16, the company remains loan free.
FINANCIAL REPORTING PROCESS
operating procedures and data accuracy. Each month, the controllers of the various
forward-looking data on revenue and margin development. The cost and operating
working capital trends are compared to budget targets and prior-year actuals. Financial
and business performance are discussed in a monthly business review call with each
divisional management team. The consolidated results and summary comments are
subsequently sent to the Supervisory Board.
by local auditors and then shared with the group. This local for global approach improves
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The Board of Management consists of a CEO, CFO and CTO. Each member has a clear set
of responsibilities and decisions are taken at either the divisional or Board of Management
level.
There was one change in the composition of the Board of Management. This came with
This decision was taken in close consultation with the company and partly on her initiative.
We thank Ms. van Dinteren for her work for the company. The CFO position is currently
experienced as a CFO and has worked previously on an interim basis for Holland Colours.
at group level.
reporting and risk management. We are also improving business intelligence and moving
to dashboarding, balanced scorecards and making increasing use of leading KPIs to
measure what we do and how we do it, next to lagging indicators.
On the marketing front, the goal is to increase our use of ‘inbound marketing'.
This technology-based approach involves creating relevant and targeted content that
helps our target groups to identify good solutions for their challenges and then come
to us to learn more about how we can help.
On the communication front, the goal is to implement an improved content strategy.
There are four drivers.
1) To demonstrate our unique DNA and distinctiveness to existing and new clients
and important stakeholders.
2) To improve our employer branding and attract new employees.
3) To increase employee pride and involve employees even more in the realization
of the strategy.
We have developed a new internal communication program to involve, connect and inform
all employees in a better way.
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INNOVATION PROGRAM
Our innovation excellence program has succeeded in optimizing our product development
the client’s setup. The innovation program further includes a rolling launch calendar
covering the coming six months.
INNOVATION INDEX
We maintain an innovation index. This rolling list measures the percentage of current-year
reasons for this. First, one of the big contributors to our innovation index exited the list as
impact on innovation, making it virtually impossible for us to visit clients to perform
co-development innovation and testing. In response, we are increasing our investments
in innovation, strongly connected to sustainability, to regain our momentum here.
CORPORATE SOCIAL
RESPONSIBILITY
organizational topics. These are safety, sustainability – our people, our products and our
processes – and product stewardship. Starting next year, we intend to produce a separate
Corporate Social Responsibility report. As a stepping stone to this, we have given the topic
Our innovation model is based on co-designing color and functional solutions with our
clients. Within this, we are placing a growing emphasis on the sustainability and circularity
of plastics. We are also moving to a more market-driven approach.
An increasing number of our solutions are based on open innovation with clients, suppliers,
research institutions, educational institutions and application partners. Together, we
develop next-generation iterations of existing products and breakthrough sustainable
and circularity solutions.
MARKET OPPORTUNITIES
traditionally, to focus our innovation on incremental improvements to our naturally
sustainable pigment-encapsulating material. Increasingly though, our markets are
changing due to growing client and consumer demand for more sustainable products
made with more sustainable processes. This is creating opportunities for us to take bigger
strides forward. For instance, we are now approached by start-ups and recyclers whose
mission is to reduce, reuse or reclaim plastics. They want our technical knowhow to help
them meet their sustainability and circularity criteria. Maybe they want to make a product
and composition. We can help by innovating products that meet that circular demand.
We continued to invest in innovation for the packaging, building & construction and
the coatings & sealants markets in 2021/2022. These programs are progressing to plan.
We did, however, feel the impact of COVID-19. This played out in two ways. First, clients
tended to focus more on meeting their immediate production needs rather than possible
innovation. Second, the restrictions on travel made it harder for us to develop and pilot
innovations with our clients. Overall though, the opportunities continue to be there.
Packaging is the most visible example, but opportunities exist in every market where
coloring recycled materials, improving recyclability, reducing coloring costs, extending
product life reducing weight and other related challenges exist.
PRODUCT INNOVATION
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stay close to our proven core technologies and products while responding to and
anticipating new market trends and innovations. Chief among these is sustainability and
circularity. This represents a trend, an innovation driver and a business opportunity for
Holland Colours.
driven by in-house product innovation and/or third-party partnerships.
Another aspect is to foster business opportunities in neighboring product areas and
market segments. This way, we can both enter new markets and extend our knowhow in
Here, as elsewhere, our company culture is an important driver for the successful
implementation of this strategy. Holland Colours is a partly employee-owned company
with direct and informal reporting lines and a strong focus on diversity. Our teamwork-
based and caring culture enables us to meet client needs with technological and
production capabilities that are global in terms of scale and holistic in terms of approach.
In 2021/2022, the Board of Management paid extensive attention to assessing key risks
that could impact the realization of the company’s strategic objectives. The Board assessed
control measures and actions that must be taken to 1), manage these risks should they
Working closely with the Audit Committee and the Supervisory Board, we carefully
assessed our risks and developed a corporate Risk Matrix. The most important risks are
summarized below, including the net risks after mitigation actions have been taken.
Our divisions, working in close cooperation with our central functions, are responsible for
The directors and controllers of our divisions have signed a statement concerning
and internal audits. As a company, we also regularly evaluate our insurance cover, the
premiums we pay and the policy excess that applies.
HOLLAND COLOURS RISK AREAS
Risk Severity Risk Likelihood Risk Level
Intolerable
****
Extreme
****
Tolerable
***
Probable
***
High
***
Undesirable
**
Possible
**
Medium
**
Acceptable
*
Improbable
*
Low
*
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Gross Net
Risk Severity Risk Likelihood Risk Level Risk Level
Strategic
Size of our current strategic segments plus competitive rivalry
** ** ** **
Cybersecurity
** *** *** **
Business agility
**** ** *** **
Compliance
Laws and regulations
**** ** *** **
Ethics
**** ** *** **
Financial
Liquidity
* * * *
Other Financial (Currency, interest rates, capital structure)
*** ** *** *
Operational
Safety
**** *** **** ***
Supply
**** *** **** **
Intellectual property
**** *** **** *
Human resources
** *** *** ***
Quality
** * ** *
We dierentiate between gross and net risk level. Net risks
remain after mitigation steps have been taken.
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Gross Net
Risk Severity Risk Likelihood Risk Level Risk Level
Society
**** ** *** ***
Sustainability
Process
** *** *** *
Product
** *** *** **
Fraud
Product pricing
** *** *** **
Authorization matrix
** *** *** **
** *** *** *
Agency commissions
** *** *** **
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Strategic
Gross Net
Risk Severity Risk Likelihood Risk Level Risk Level
Size of our current strategic segments plus competitive rivalry
** ** ** **
Cybersecurity
** *** *** **
Business Agility
**** ** *** **
SIZE OF OUR CURRENT STRATEGIC SEGMENTS PLUS COMPETITIVE RIVALRY
Sustainability and recycling increase the reuse of polymers. This could reduce the need for
color concentrates but is also an opportunity for functional additives. We closely monitor
developments in our core segments and explore opportunities for innovations in other
niche segments.
Overall, our global presence and strong relationships with key players in both the
packaging and building & construction industries continue to drive the development of
our product portfolio. To protect our technology, we apply for patents where feasible.
The risk that we lack scale or are seen as lacking scale continues to receive full
management attention and we are focused on developing the right products and
technologies. Our divisional sales and technology teams, in conjunction with our
Managers, play a central role in mapping our path ahead.
We also closely track the dynamics in what is a competitive landscape. We see, for
example, that global players are separating their colorants businesses, acquiring
compounders or teaming up with others. And in North America in particular, we see
some trends towards concentration in our client base.
These trends present both challenges and opportunities for smaller players like us
that have a global reach serving niche markets based on a service-oriented approach.
For instance, there is a trend towards the standardization of technology and machinery
among convertors in the packaging industry.
Brand owners in this segment are also having a growing impact. As these are global trends,
we manage this segment of our business on a global basis where it relates to strategy and
product innovation.
One of the risks of being a relatively small player with a global reach is that we could end
up stretching our resources too thinly over the globe, while at the same time failing to be
risk and we remain closely connected to local developments. In the North American region,
In EMEIA and Asia, we have dedicated sales representatives in the various countries, in
the model and its elements and make changes where needed.
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CYBERSECURITY
Cybercrime risk is increasing and becoming more severe. We regularly train personnel with
respect to cybercrime. We also perform penetration tests through an external partner on
a regular basis. We have insurance coverage for cybercrime.
BUSINESS AGILITY
This covers the risk that the company and our employees will be unable to adapt rapidly
digitalization and new software will increase performance levels, professional behavior and
process orientation.
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Compliance
Gross Net
Risk Severity Risk Likelihood Risk Level Risk Level
Laws and regulations
**** ** *** **
Ethics
**** ** *** **
manage ever-changing local and international compliance requirements.
LAWS AND REGULATIONS
Without an internal control department or compliance department, there is no independent
body to control the business and fraud risks. Employees are co-owners of the company
and as such responsible behavior can be expected from them. Nonetheless, our Code of
Conduct needs to be actively monitored and communicated.
In our risk assessment processes, we focus on strictly managing the introduction of new
raw materials and on product and production compliance. In the packaging segment,
we are subject to audits and reviews by our clients, which helps to keep us close to and
aligned with their requirements, and to comply with international regulations related to the
use and application of materials.
From a preventative perspective, we partner closely with our key clients to interpret new
regulations. We achieve this by reformulating products and/or changing our internal
operations where needed. The latter may also be prompted by client audits (mainly in
packaging). All our manufacturing sites are ISO-registered and subject to regular audits,
including, since this year, our site in Richmond, Indiana, as well.
When it comes to incidents, we take a similarly structured approach to learning from them.
Our complaints registration and handling system has achieved outstanding scores for its
structure and content in multiple ISO audits. Complaints are discussed promptly by a
Quality Assurance team consisting of Sales, Operations, Technical and Quality Management,
with follow-up on the elimination of root causes. Product compliance and complaints
management are an agenda item at divisional management team meetings, while product
liability risk is covered in the agreements with clients and suppliers and insured through
third parties.
ETHICS
distributors. We want not only our employees but also our business partners to show
Competence, Responsibility and Teamwork) of Holland Colours and our Code of Conduct
provide a strong basis for the culture of the company. In order to manage our risk
exposure we will introduce an Ethical Compass in 2022/2023.
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Financial
Gross Net
Risk Severity Risk Likelihood Risk Level Risk Level
Liquidity
* * * *
Other Financial (Currency, interest rates, capital structure)
*** ** *** *
LIQUIDITY
The risk that we do not have enough cash to pay our employees and suppliers.
OTHER FINANCIAL (CURRENCY, INTEREST RATES, CAPITAL STRUCTURE)
CNY, MXN, CAD and HUF. We have both revenues and expenses in all currencies, so some
an acceptable risk.
health. The risks that are part of our regular business operations (such as currency and
credit risks) are listed in the Financial Risk Management section of the Financial Statements.
a standby credit line for ad hoc needs.
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Operational
Gross Net
Risk Severity Risk Likelihood Risk Level Risk Level
Safety
**** *** **** ***
Supply
**** *** **** **
Intellectual property
**** *** **** *
Human resources
** *** *** ***
Quality
** * ** *
SAFETY
Health and safety risks are inherent to our operation given that we are a company with
internal logistics. We work according to a Safety Ladder concept that addresses all aspects
related to safe behavior. The Safety Ladder methodology has been introduced globally,
although it is still less well known outside Europe. Local practices and regulations also form
L1 and L2 incidents. Learnings from near misses are shared between the divisions.
Information about a healthy lifestyle and good ergonomics are shared with employees and
we have programs in place that contribute to the well-being of our employees. Continued
training in health, safety and, in particular, awareness and behavior are in place.
SUPPLY
Any inability to secure raw materials on time disrupts our production process and means
INTELLECTUAL PROPERTY
This is the risk that our IP is used by our competitors. Our IP is registered. The recipes are
production environments that are not part of Holland Colours.
HUMAN RESOURCES
Our workforce is aging. In western countries (sites in Europe and USA), labor markets are
tight. There are fewer people interested in and/or available for jobs in operations. We are
paying increased attention to ergonomics and investing in training and automation to make
these jobs more attractive.
QUALITY
Quality control reduces the risk that our products will be recalled due to production errors.
applications (e.g. food contact).
We have incorporated the scale-up phase as an integral part of projects that relate to new
product innovation. All global projects are subject to extensive review by our Chief
phase of a product development project. Coordination between the project leader and
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Society
Gross Net
Risk Severity Risk Likelihood Risk Level Risk Level
**** ** *** ***
GLOBAL ECONOMY AND POLITICS
We have a large geographical footprint and we operate in a lot of areas that are not
or project management (especially given the high number we currently have running).
We monitor the risks and act upon them. It is highly unlikely that political and economic
region. As a result, we changed our policy related to doing business in the region and
developments but decided that we are willing to continue to supply existing products
to existing customers under the prevailing EU sanctions. The company will continue
to monitor the situation closely.
Sustainability
Gross Net
Risk Severity Risk Likelihood Risk Level Risk Level
Process
** *** *** *
Product
** *** *** **
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PROCESS AND PRODUCT
We have established ambitious goals for 2030. The risk is that we experience delays in
achieving these goals. We have made sustainability an integral part of our strategy and this
topic is high on our agenda with a roadmap being put in place. The divisions are
developing concrete actions and we are in the process of hiring a sustainability manager.
Fraud
Gross Net
Risk Severity Risk Likelihood Risk Level Risk Level
Product pricing
** *** *** **
Authorization matrix
** *** *** **
** *** *** *
Agency commissions
** *** *** **
The risk of the possibility of the company being subject to fraudulent activity. The company
PRODUCT PRICING
We have a process in place for authorizing product pricing. There is no formal control in
place regarding adherence to the procedure. However, it is under control because of the
regular analyses we run of our margins during end-of-month procedures.
AUTHORIZATION MATRIX
year.
GIFTS FROM/TO RELATIONS
Our Code of Conduct includes rules related to these gifts. In general, any potential gifts
from suppliers or business partners (especially those received around Christmas) are
collected centrally and distributed among all employees.
AGENCY COMMISSIONS
In some markets, Holland Colours works with distributors or agents. Two years ago, all
Holland Colours agents signed the Code of Conduct that applies to them. For new agents, this
Code of Conduct is an integral part of their contract. Every year, we will evaluate and register
whether a controversial situation has occurred in the context of the Code of Conduct, and
how it has been dealt with. All Holland Colours distributors have received the Code of
Conduct and an accompanying letter in which we ask them to act in accordance with it.
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Risk-related events in 2021/2022
2021/2022 saw two events related to our risk management policies.
PAYMENTS THAT DID NOT COMPLY WITH THE CODE OF CONDUCT
Risk Matrix and the Code of Conduct it appeared that irregular payments were made to
employees of customers.
Upon this report group management ordered these payments to be stopped immediately
and formed a steering committee within Holland Colours to investigate this matter.
The committee consisted of the chair of the Audit Committee and the head of the legal
conclusions of this investigation were reported to the Audit Committee in March 2022
and have been communicated externally in a press release dated March 10, 2022.
The investigation found evidence of payments made to employees of a limited number
of customers over a period of at least eight years. Total payments varied between
were accounted for in the accounts of PT Holland Colours Asia, but certain administrative
aspects were not done properly. Although these payments themselves do not violate
Indonesian law, they do not comply with the Holland Colours Code of Conduct.
Warning letters were sent to the employees directly.
Following this incident, the Board of Management sent a letter dated March 31, 2022,
to all legal representatives of all group companies to remind them of the importance of
compliance with the Code of Conduct, the Purchase Code, the Whistle blower Policy and
the Agent/Distributor code. Awareness is considered a key element and we are acting to
remind people of this. We will also train them accordingly, to emphasize its importance.
In addition, the Board of Management informed the employees of the company about
the following planned remediation actions:
•
The introduction of an Ethical Compass to emphasize the importance of integrity to
employees. This will help them to take moral considerations into account around
risk-sensitive integrity issues. Typical themes will include fraud, bribery and corruption,
psychological and physical safety and cybersecurity. We intend to launch the Ethical
Compass in the second half of 2022/2023.
•
The introduction of a Due Diligence process to monitor compliance with local laws and
regulations per division/subsidiary.
•
The introduction of an ABAC policy (Anti-Bribery Anti-Corruption) and Dawn Raid Manual.
•
Changing the current whistle blower policy based on the new legislation following the bill
as result of European Directive 2019/1937 The Whistleblowing Directive.
•
The fact that the CEO also acts as our Compliance Officer and in this role, he actively
monitors adherence to the Code of Conduct on behalf of the Board of Management
in conjunction with all legal representatives of the company and local management.
Another action has been to set up the Risk Matrix mentioned earlier in this section.
matrix includes risks related to compliance with laws, regulations and our policies and
codes. The Board of Management will discuss these with the statutory board of each
subsidiary company on a half-yearly basis.
THE SITUATION IN UKRAINE
As mentioned elsewhere, Ukraine, Russia and Belarus form only a modest part of our
operations there. We have publicly condemned the violence and its impact on the people
of Ukraine. We have further decided to halt all market and business development in
Russia and Belarus, but to continue to supply existing clients in line with EU sanctions.
We continue to monitor the situation closely and will follow the applicable international
laws and regulations regarding sanctions.
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSMANAGEMENT BOARD REPORT
Holland Colours traditionally does not include forward-looking statements in our Annual
circumstances and potential impact of COVID-19. However, with the situation around
COVID-19 currently less severe, and having learned, to a degree at least, to cope with its
impact, we are reverting to our previous approach. Obviously, we will continue to monitor
the COVID-19 situation and its wider consequences closely, as we will the situation in
Ukraine. Clearly, there continues to be a very high degree of uncertainty about current
events and what these will mean for the global economy, for our clients and so for our
business going forward.
In accordance with provision 1.4.3 of the Code and Section 5:25c of the
Dutch Financial Supervision Act, the Board of Management declares that,
to the best of its knowledge:
•
The Report of the Board of Management as included in this Annual Report provides
sufficient insights into any deficiencies in the effectiveness of Holland Colours’ internal
risk management and control systems;
•
The aforementioned systems provide reasonable assurance that Holland Colours’
Financial Statements contain no material errors;
•
The Report of the Board of Management lists those material risks and uncertainties that
are relevant to the expectation regarding Holland Colours' continuity for a period of
twelve months following the preparation of the Report of the Board of Management;
•
The Financial Statements as included in this Annual Report provide a true and fair view
of the assets, liabilities, financial position and profit for the financial year of Holland
Colours and the group companies included in the consolidation; and
•
The Report of the Board of Management as included in this Annual Report provides a
true and fair view of the situation on the balance sheet date, business development
during the financial year of Holland Colours, and of its affiliated group companies
included in the Financial Statements. The Report of the Board of Management describes
the material risks to which Holland Colours is exposed.
Apeldoorn, May 25, 2022
Board of Management
Coen Vinke (CEO)
Eelco van Hamersveld (CTO)
OUTLOOK 2022/2023 DECLARATION OF THE
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CORPORATE
SOCIAL
RESPONSIBILITY
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Corporate Social Responsibility (CSR) is central to our organization, to our
position in the market and the way we want to work. Because of this, we
include three key organizational and operational areas under our CSR
umbrella. These are safety, sustainability and product stewardship. Next
year, we intend to produce a separate Corporate Social Responsibility
report. As a stepping stone to this, and to underline the importance of
CSR as a driver for our business, we have given the topic its own section
in this year’s Annual Report.
Safety
We are determined to provide a safe and healthy working environment for our people.
accidents. We therefore train and encourage our employees to report incidents, accidents
and near misses, to learn from them and to improve our processes, procedures and
behavior when these do occur.
•
An L1 accident is a lost-time injury;
•
An L2 accident is one that requires external medical treatment (rather than first aid),
or which leads to restricted duties for the person involved;
•
An L3 incident is one that requires first aid or involves damage to material or in which
smoke or fire are involved;
•
The numbers of accidents (L1 and L2) fell by one in 2021/2022 versus the previous year,
on safety to ensure a safe workplace.
Safety 2021/2022 2020/2021
L1 : Lost time 5 7
L2 : Restricted Duty / Medical Treatment 2 1
L3 : First Aid, Material or Fire 55 37
166 17
THE SAFETY CULTURE LADDER
Our main goal, zero accidents, underlines the need for the program we introduced in
2020/2021 – the Safety Culture Ladder. This program aims to change our attitude and
behavior regarding safety by encouraging each of us to signal potential accident or injury
risk factors. To be proactive and to take preventative measures. This goes beyond simply
following the rules. The program has been embraced by all divisions, though its initial
rollout was slowed by COVID-19. In 2021/2022, we did better in terms of managing safety,
but this has not yet fed through to our overall safety performance. However, the number
of near miss reports went up. This can be seen as positive because it indicates that there
is a greater general awareness around safety.
In 2021/2022, every division had an active safety audit team, and all divisions moved up
the ladder compared with their 2020/2021 baseline assessment, getting closer to fully
completing step 3. There is more focus on avoidance through reporting near misses and
more focus on anticipation versus reacting. The Board of Management has also given a
clear signal to the organization regarding our safety targets. At the start of 2021/2022,
the Board of Management set a rule requiring the organization to report all L1 and all
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Aiming for zero accidents
We are determined to provide a safe and healthy working environment. We
therefore aim for zero accidents. We continuously train our people and work to
create the right conditions so each of us can do our best every day.
As part of this, we encourage everyone to report not only accidents and incidents
but near misses as well. Near misses are things we see or experience that are or
could be dangerous, but which thankfully have not led to an accident. Therefore,
the more near misses we report, the fewer incidents and accidents there will be as
it means we can act to prevent them.
44
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THE SAFETY CULTURE LADDER
5
4
3
2
1
The goal of the Safety Culture Ladder is to
support the organization in embedding
a consciously proactive attitude to safety.
This means both following the rules and
actively thinking about, spotting and
agging safety risks as people do their
work. This approach to safety is all to do
with attitude, behavior and culture. Do
people feel they can raise what they see
as an unsafe situation? Do they recognize
potentially unsafe situations? Is safety
discussed regularly and do employees feel
heard on safety issues? The ladder was
developed for the construction industry,
which employs a lot of onsite contractors.
The fth step is therefore less applicable
to Holland Colours. Our goal is to achieve
step four: Proactive.
Pathological
The company’s attitude is that it doesn’t have accidents so
doesn’t need to invest in safety.
Reactive
The company generally only tightens safety after something has gone
wrong and employees do not generally feel responsible for their own
or their colleagues’ safety.
Calculating
The company pays attention to health and safety and has clear safety
rules, but safety is seen mostly as a senior management task.
Progressive
Safety is a standard part of contractors’ operational
processes as well, and safety is ingrained in the
thinking and behavior of all employees.
Proactive
Safety is a top priority and is treated proactively within the company’s
operations. Along with structural investments in raising safety awareness,
employees are encouraged to raise unsafe behavior with each other.
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Sustainability
Part of our mission is ‘to be recognized as a contributor to a sustainable industry.’ This
involves working as a co-design partner to create solutions that support our clients in their
sustainability goals. Through this, we contribute to the creation of a sustainable society.
In 2020/2021, Holland Colours communicated a new sustainability vision and framework
as part of our Responsibility core value. The vision that emerged is ambitious: “We envision
a colorful world in which we are the winning sustainable solution.” As an ongoing work-
in-progress, the framework underpins how we want to approach the three central
sustainability topics for Holland Colours: our people, our products and our processes.
The sustainability framework provides a tool for evaluating and making product, process,
people, technology and other decisions. It also provides a guide for the choices and impact
each of us at Holland Colours chooses to make, from big things to small. And it acts as an
umbrella for the numerous community outreach programs our divisions operate in the US,
Asia and Europe.
IN OUR DNA BUT MORE RELEVANT THAN EVER
Sustainability has always been a feature of our pigment encapsulation technology as it is
based on a natural resource. This puts us in a strong position to respond to our clients’
growing expectations in this area. They increasingly expect our products, and by extension
theirs, to be sustainable, whether that means renewable, recyclable or circular. The impact
of these changes is most obvious in the use of colorants and additives for packaging.
However, we see the same trend in building & construction and in coating, sealant and
adhesive applications. Addressing sustainability issues and circular economy requirements
is going to be a key issue for the ongoing continuity of Holland Colours.
OUR FOCUS
Within sustainability, we concentrate on three broad areas: our people, our products and
our processes. This focus is derived from a selection of the United Nations Sustainability
relevant to Holland Colours internally, to our clients, to brand owners and to our value
9. Innovation and infrastructure;
12. Responsible production and consumption; and
17. Partnership.
“Sustainability at Holland Colours covers
three areas: our people, our products and
our processes”
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FINANCIAL STATEMENTSCSR
FOCUS AREAS
Based on the selected SDGs, we dened three focus areas:
We invest at least 2% per year
of our personnel expenses
in responsible care for our
employees. This investment is used
to deliver training, for individual
and team development and/or as
time that can be spent on local
social aid activities.
By 2030, we will have reduced
the CO
2
impact of our operational
activities by between
30% and 50%.
We will structurally increase our
annual investment in innovation.
By 2030, 90% of our revenue will
be based on products that
contribute to sustainability.
We protect the safety,
health and welfare
of HCA employees and
oer development
opportunities to all. Given
our geographical spread,
we consider it important
to employ nationally.
We service our
customers with products
that are produced
regionally, and we design
our processes to support
the sustainable use of
energy and raw materials.
Together with our
customers and partners,
we co-create sustainable
solutions and develop
products that enable
recycling, the reduction
of food waste and the
reduction of energy
consumption.
WE ENVISION A
COLORFUL WORLD
IN WHICH WEARE
THE WINNING
SUSTAINABLE
SOLUTION
Our ProcessesOur People Our Products
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2020/20212021/2022
Energy
Consumption
In gigajoule
3%
2020/20212021/2022
Materials
In tons
8.8%
2020/20212021/2022
Emissions
CO
2
equiv-g
4.1%
2021/2022
2020/2021
2021/2022
2020/2021
2021/2022
2020/2021
2021/2022
2020/2021
Water consumption
In m
3
Waste
In tons
New hires by gender
In total
Diversity & Equal Opportunities
11,371 921
36 5216
23
11,874 1,008
18 3315
24
47,970
49,399
15,892
14,608
511
490
+ =
20
25
Employees Management
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FINANCIAL STATEMENTSCSR
A NEW BASELINE AND ACTION PLAN
In 2021, we began establishing the foundations for our future sustainability measures.
This includes conducting a new baseline measurement to assess how environmentally
friendly we are now. In addition, we have begun creating awareness about sustainability
internally by communicating about sustainability, our vision and our goals and so
stimulating the internal conversation. Later this year, we will develop a ‘One HCA’ global
action plan. This will be made by all employees. They will be able to contribute and be
involved in reaching our goals. And from 2023 onwards, we will use this to share, improve
and optimize what we do.
OUR PEOPLE
As a company, we continuously train our people and work to create the right conditions
for each of us to give our best every day. We are strong supporters of training on the job,
with external training and education available as needed. As well as skills-based training
supporting wider personal development based on competencies training (knowledge and
behaviors that enable someone to be more widely successful within Holland Colours).
This transition is driven by changing business needs and by the need to attract new talent
who see self-development and personal growth as key criteria when choosing an
employer. As a company, we are going to become more digital and more data-driven.
With uncertainty increasing, the world in which we operate is becoming more complex.
We therefore need to prepare ourselves for what is coming and to attract the next
generation of Holland Colours employees. Building our competencies will enable us to
learn and act faster as an organization and for each of us to behave more proactively.
Better Together Dialogues
Part of our transition involves teaching ourselves to become a learning organization
that delivers higher performance. In 2020/2021, we conducted a small-scale pilot to
provide competencies-related feedback to around 50 employees. The pilot, called the
development and employability into our HR processes. Last year, we expanded the
selected an IT tool to support the process and trained our leaders.
The idea behind the Better Together Dialogues is to support a personal discussion about
each employee’s opportunities and challenges, and to learn from each other. By doing so,
their own needs, ambitions and work-life situation.
The reaction has been positive, with people enthusiastic about the idea of having open,
goals-oriented career discussions. The next step is to hold these conversations across the
company. Even though they are still in an early phase, the Better Together Dialogues have
already triggered an increase in people taking steps to develop – for example, by
requesting coaching.
Social outreach
for training and development and social action programs. This money is used to fund
structural development activities, such as leadership training for the Better Together
training.
Turning to the social aspects of our people commitment, March this year saw our
employees rally round to help the people of Ukraine. They sent clothes and other goods
from Apeldoorn to our factory in Hungary, where they were handed to the local authorities
and the Red Cross for distribution. In addition, our employees around the world raised
money to help Ukrainian refugees. Holland Colours and Holland Pigments also made
donations.
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OUR PRODUCTS
Sustainability is moving from a nice-to-have extra to a key driver for innovation in our
industry. That trend weakened a little because of the impact of COVID-19, as clients
focused on meeting their immediate production needs, but this has not changed the
underlying direction in which our industry is going. The whole materials market is facing
a fundamental shift from fossil fuels to sustainable alternatives, and from use-once
consumerism to reuse and full circularity. Logistics, economies of scale, the location and
availability of raw materials and the unpredictability of geopolitics are also factors in this
trend. This shift will form part of the focus of our next strategic review and the strategy
that emerges from this.
As mentioned, 2021/2022 was in some ways a standstill year in terms of sustainable
product introductions and product innovation. The impossibility of traveling to monitor
pilot trials, for example, and our clients’ understandable focus on meeting immediate
production and market needs were limiting factors. However, we continued to build our
understanding and awareness of where we stand. We worked to get a more detailed
insight into where our client needs lie. We continued to reach out to our suppliers to learn
more about how they develop their products and to explain to them, where necessary,
about the need to consider the sustainability impact of their products on what we make
and innovate.
OUR PROCESSES
Measured against our current baseline measurement from 2015, we have reduced our
CO
2
trend of recent years. In part this was because we traveled less, but it was also the result
The table shows the overall progress we have made over the last few years. For this,
we have measured and tracked our CO
2
2
/kg by 2030,
compared with the baseline of 2015. The results in 2021/2022 show that steps we have
As new standards for measuring and reporting impact have been introduced, we have
Corporate Accounting and Reporting Standard, the Corporate Value Chain (Scope 3)
standard and the Product Life Cycle Standard of the World Resources Institute (WRI).
2015/2016 2016/2017 2017/2018 2018/2019 2019/2020 2020/2021 2021/2022
CO
2
equiv-g 622 557 511
0 0
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FINANCIAL STATEMENTSCSR
Electricity is the biggest factor in our CO
2
green electricity supplies, for example, we will be able to reduce our footprint further.
We also see opportunities to reduce our footprint by translating sustainability best
practices between our production sites.
Product Stewardship
Our Product Stewardship team is recognized as a trustworthy source of information not
only by our clients and suppliers, but also by brand owners as well. The team also
represents a key pillar in our commitment to sustainability. The team provides product
health and safety declarations to clients and translates external regulations into internal
advice on how we should prepare to comply with them.
In 2020/2021, the team took a lead in informing our clients and the wider market about
the plans by the European Union to ban the use of titanium dioxide (TiO2) in PET bottles.
The team followed the development of the regulations and interacted with suppliers on
how to implement them in their product development, product statements and client
communications. In the end, the ban, whose six-month phase-out period began in
communications and awareness-raising actions have been highly appreciated by the market.
Last year, we again demonstrated our product stewardship credentials by acting promptly
and openly to inform our clients of the impact of the EU’s 15
th
Amendment changes on
PET packaging. Many of our clients were unaware of the new amendment or its potential
impact, and they appreciated the fact we informed them openly and honestly. We are
currently working to reformulate our products in line with the revised rules on food
contact materials.
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Holland Colours is a limited liability company with common shares publicly
listed on the Euronext Amsterdam stock exchange.
The company’s management structure complies with Dutch law and has a two-tier
structure consisting of a Board of Management and a Supervisory Board.
Holland Colours promotes responsible behavior towards society and the environment,
while at the same time taking into account the interests of its various stakeholders:
employees, shareholders, other capital providers, customers and suppliers. The Board
of Management and Supervisory Board are ultimately accountable for giving due
consideration to the interests of all parties involved, focusing on the continuity of the
company and long-term value creation for relevant stakeholders, both at present and in
the longer term, and are held accountable for the performance of their duties by the
internal control framework play an important role in this process. For a description of
these systems, please refer to the section on Risk Management.
Holland Colours is incorporated and based in the Netherlands . As a result, our governance
structure is based on the requirements under Dutch legislation and the company’s Articles
exposure of our business, we conduct our operations in accordance with internationally
creation and engagement are key components of the Holland Colours culture and way
of doing business. They are embedded in our core values. Holland Colours endorses the
available at www.mccg.nl.
Board. In addition, the Diversity Policy and a Policy on Bilateral Contacts with shareholders
have been updated, and the Articles of Association of Holland Colours have been aligned
with the Code.
The statutory responsibility resides with the Board of Management. This consists of the
a non-statutory interim CFO. They convene every two weeks with a formal agenda and a
list of action items and decisions made. The Board of Management holds regular meetings
with the divisional management teams for monthly business reviews and quarterly updates
approval by the Board of Management. Cost budgets are approved as part of the annual
budget review. During the extraordinary circumstances related to COVID-19, the Board of
Management and divisional managers participated in regularly digital meetings to discuss,
align and act on the actual situation, and the Supervisory Board was kept informed.
implementing the company’s strategy as well as its day-to-day operational management.
The members of the Board of Management attend the periodic meetings of the
Supervisory Board as well as incidental update calls. The CEO is the main contact for the
Supervisory Board.
ANNUAL GENERAL MEETING OF SHAREHOLDERS
statements, the dividend proposal, the discharge of their duties performed by the
members of the Supervisory Board and the Board of Management, and the adoption
of the remuneration policy of the Board of Management and the Supervisory Board.
procedure for attendance and voting at the meeting are published in advance and posted
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSGOVERNANCE
on the corporate website. Matters proposed for consideration, approval or adoption are
dealt with as separate agenda items and explained in writing in advance of the meeting.
These proposals include, where applicable:
•
Adoption of the financial statements;
•
Dividend proposal;
•
Discharge of their liability for the duties performed by the members of the Supervisory
Board and the Board of Management;
•
Appointment and reappointment of members of the Board of Management and the
Supervisory Board;
•
Remuneration policy of the Board of Management and the Supervisory Board;
•
Appointment of the auditor;
•
Other important matters, such as major acquisitions or the sale or demerger of a
substantial part of the company, as required by law or under the Articles of Association;
•
Authorization of the Board of Management to issue new shares;
•
Amendments to the Articles of Association.
The company provides options to its shareholders for voting by proxy. Holding shares in
the company on the registration date determines the right to exercise voting rights and
one vote’ principle and by an absolute majority of votes, unless the law or the company’s
Articles of Association stipulate otherwise.
substantiated and must be submitted in writing, or electronically, to the company at least
made available on the company’s corporate website within three months of the meeting
after the meeting date.
DIVERSITY POLICY
its Board of Management and Supervisory Board. The objective of the Diversity Policy is to
enrich the Board of Management’s perspective, improve performance, increase member
value and enhance the probability of achievement of Holland Colours’ goals and objectives.
The policy is designed to promote diversity, including in terms of nationality, age, gender,
education and professional background. One out of four members of the Supervisory
Board is female. Until February 2022, the Board of Management consisted of one woman
and two men. Following the departure of Tanja van Dinteren, the Board of Management
temporarily consists of two men. Further information about the composition of the Board
of Management and the Supervisory Board can be found in the reports of the Board of
COMMITTEES
There are two committees of the Supervisory Board: the Audit Committee and the
Remuneration Committee.
Audit Committee
The Audit Committee assists and advises the Supervisory Board in its responsibility
experts.
Remuneration Committee
The Remuneration Committee (‘RemCo’) assists and advises the Supervisory Board
on matters relating to the selection and appointment of the members of the Board
of Management and Supervisory Board. The RemCo also monitors and evaluates
the remuneration policy for the Board of Management. The RemCo consists of
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ANTI-TAKEOVER PROVISIONS AND CONTROL
has a majority shareholder, Holland Pigments BV, in which the collective employees have
BILATERAL CONTACTS
The company fully endorses the importance of a transparent and balanced provision of
relevant to shareholders, doing so equally and simultaneously, with due consideration
of the exceptions provided for under applicable law. All this is set out in Holland Colours’
policy on bilateral contacts with shareholders. The full text of the policy is available on
www.hollandcolours.com.
CODE OF CONDUCT
in a fair and ethical way, complying with local rules and regulations, and treating our
employees and business partners with respect. It provides guidelines for preventing unfair
competition and corruption or bribery and states the conditions for a safe and healthy
work environment. To emphasize the importance of this, Holland Colours has drawn up
an Anti-Bribery and Anti-Corruption policy for all Holland Colours entities and employees.
Holland Colours will also set up an Ethical Compass to emphasize the importance of
integrity to employees. This compass will help them to take moral considerations into
account around themes involving risk-sensitive integrity issues. Typical themes include
fraud, bribery and corruption, psychological and physical safety, and cybersecurity.
In addition, Holland Colours will introduce employee training with respect to ethical
behavior and set up a due diligence process for all subsidiaries to screen for compliance
issues, including anti-bribery and anti-corruption policies. Holland Colours has a global
whistleblower policy, while adherence to the company core values is part of the annual
employee performance review cycle.
we maintain our unique employee participation model and culture.
The Supervisory Board and the Board of Management endorse the principles of Corporate
apply to internationally operating listed Dutch companies.
explanatory notes, is available on www.hollandcolours.com. The deviations from the Code
relate to the subjects outlined below.
BOARD OF MANAGEMENT
The Code states that the main elements of the contracts of the company’s Board of
Management members must be published without delay once the contract has been
concluded. As we do not want to single out this type of information, Holland Colours
continues to publish this information as an integral part of the Annual Report. The
remuneration policy for the Board of Management for the year under review was
formulated by the Remuneration Committee. It is further described in the Remuneration
the provisions governing options do not apply.
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSGOVERNANCE
SUPERVISORY BOARD MEMBERS
As long as Holland Pigments BV holds an interest of at least one-third of the company’s
issued share capital, it is entitled to nominate one member of the Supervisory Board.
The Supervisory Board has established a Remuneration Committee and an Audit
of the Audit Committee. This is on account of his expertise. The duties of the selection
and appointment process are performed by all members of the Supervisory Board.
INTERNAL AUDIT FUNCTION
The internal audit function assesses the design and operation of the internal controls
annually if it is necessary to establish an internal audit department and includes the
conclusions in the report of the Supervisory Board.
COMPANY SECRETARY
CONFLICTS OF INTEREST
As Holland Pigments BV is a majority shareholder in Holland Colours, with all employees
of Holland Colours having shares in Holland Pigments, any transactions between
approval by the Supervisory Board.
SHAREHOLDER POWERS
For practical reasons and because of the costs involved, the provision stipulating the
option for shareholders to follow meetings with investors and analysts and presentations
and press conferences in real time is not observed. All relevant information is immediately
published on the company’s website. There have been no substantial changes to the
Code is published on the company website. Any future substantial changes will be
of the Supervisory Board. The acquisition price must be between the amount equal to the
Amsterdam.
for the Supervisory Board, regulations of the Audit Committee and the Remuneration
Committee, the Diversity Policy and the Policy on Bilateral Contacts with shareholders,
the Remuneration Policy of the Board of Management, the Remuneration Policy of the
Supervisory Board, the company’s Articles of Association, the Whistleblower Policy,
of Shareholders.
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Prevention of Insider Trading
In compliance with the Dutch Financial Supervision Act, Holland Colours has adopted
internal regulations regarding investments in the company’s shares, share ownership and
preventing the abuse of insider information. Moreover, the duty of disclosure and the
incorporated into these internal regulations where applicable.
These internal regulations apply to the Supervisory Board, the Board of Management
and local managers and a circle of employees, as well as to a number of advisors.
regulations and liaises with the Netherlands Authority for the Financial Markets (AFM).
Interests of Members of the Supervisory Board
and the Board of Management
At March 31, 2022, the Supervisory Board members and the members of the Board of
Management owned the following shareholdings, which are held as long-term investments:
In Holland Colours NV In Holland Pigments BV
March 31, 2022
Supervisory Board
Roland Zoomers
Aukje Doornbos
Jorrit Klaus
Board of Management
Coen Vinke
Eelco van Hamersveld
March 31, 2021
Supervisory Board
Roland Zoomers
Aukje Doornbos
Jorrit Klaus
Board of Management
Coen Vinke
Tanja van Dinteren
Eelco van Hamersveld
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSGOVERNANCE
TEAMWORK AND OUR CLIENT
Our client manufactures and distributes products for
the building and construction markets in the US and
Canada. Its solutions are popular with both industry
professionals and homeowners, and the company is
known for its color palette of timeless classics and
on-trend options.
OPTIMIZE PRODUCT,
COMMERCIAL AND
OPERATIONAL
PERFORMANCE
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A PARTNER FOR CURRENT AND FUTURE NEEDS
Holland Colours co-designs many of the colorants that this client
uses to create their beautifully colored products, and we work
closely with their product management and purchasing teams.
On the purchasing side, we produce to order and hold inventory
to be released when the client requires. We also monitor their
stock levels, so they can reorder in time and so avoid any
problems.
On the product side, we help our client to develop new color
options and enhance the weathering performance of their
building products, which is critical. Process improvements, such as
increasing colorant utilization, reducing the letdown ratio and
optimizing the processability, are also important to this customer.
“I see really good performance in the products coming out of our
plant,” says our client, “and the Holland Colours people are very
good to work with. They are responsive, open to discussions, they
will investigate technologies, help us with open-ended technology
questions ......, so there are a lot of reasons why we keep working
with them and coming back.”
OVERCOMING SUPPLY CHAIN CHALLENGES
As with every customer, reliability is the number one supplier
requirement. “Our demand has gone way up because of COVID-19,
while the supply chain has gotten tighter for everyone.” And
despite some challenges in the last few months, they feel Holland
Colours has helped them to try to make the best of the situation:
“They go the extra mile to make sure we do have product. They
know how important it is to us.”
Another quality our client values is that we think with them
about performance issues. “Holland Colours is very good about
working with us as we look at alternative chemicals to increase
performance,” the client says. “They are also open to talking about
trends and developments, and they will ask if a technology might
be appropriate for us and what would that mean.”
WORKING TOGETHER TO RAISE PRODUCT PERFORMANCE
“We don’t just buy colorants,” the client continues, “we buy
colorants to incorporate into products. Any help Holland Colours
can provide to support us in our broader performance attributes
is good. As a color house, they have done a great job.
The opportunity in the future is to continue to think about
technologies that impact color but are also helpful for us from a
performance perspective. There’s more going on than meets the
eye. Our products need to be engineered well and we rely on
Holland Colours to help us engineer the solution.”
“There’s more
going on than
meets the eye. Our
products need to
be engineered well
and we rely on
Holland Colours to
help us engineer
the solution”
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSGOVERNANCE
REPORT OF THE
SUPERVISORY
BOARD
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SUPERVISORY BOARD
Roland Zoomers
Chairman
1950, Dutch
Date of initial appointment
July 9, 2015
Term of oce
2019 – 2023 (second term)
Additional positions
•
Director Mandaat
Investments BV
•
Member Supervisory Board
Aukje Doornbos
Member
1979, Dutch
Date of initial appointment
July 9, 2015
Term of oce
2019 – 2023 (second term)
Additional positions
•
Managing Director
Covestro Netherlands
Jorrit Klaus
Member
1969, Dutch
Date of initial appointment
October 26, 2017
Term of oce
2021 – 2025 (second term)
Additional positions
•
Managing Director
Synres BV
Deputy Chairman
Date of initial appointment
Term of oce
Additional positions
•
Board Member
Holland Pigments BV
•
Chairman Stichting Administratie-
kantoor ’s-Heerenhove Heerde
•
•
Board Member Peerwith BV
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSSUPERVISORY BOARD REPORT
With the COVID-19 pandemic continuing to impact the global economy,
2021/2022 again posed challenges for the Holland Colours organization
and its people. However, the experience again conrmed that the company
and its employees are able to adapt well to changes outside their immediate
control. We saw this in the way people worked together successfully even
when they were working from home or in bubbles. We saw it in the way
new and long-serving employees successfully blended as a team to continue
putting the client rst. We saw this in the way teams maintained strong
client relationships, despite being unable to meet face to face. And we saw
this in the skilled way people managed production and logistics to ensure
that Holland Colours maintained its reputation as a partner that its clients
can rely on.
these very challenging and disrupting times. This is a compliment to everyone who works
locations will be able to rise to the serious challenges the world continues to face.
COMPOSITION OF THE SUPERVISORY BOARD
and has extensive knowledge of the company. Holland Pigments BV therefore proposes to
The Supervisory Board has four members, which we believe to be in proportion to the size
of the company. The board has two sub-committees – the Audit Committee and the
The size of the board does raise one issue: our non-alignment with current Dutch
guidelines and planned future law on diversity and female representation in senior
management. At present, we have one woman on the Supervisory Board, representing
we do not want to increase the size of the Supervisory Board, we have decided to maintain
the current balance.
COMPOSITION OF THE BOARD OF MANAGEMENT
There was one change in the composition of the Board of Management during the past
decided, partly on her initiative, that she would resign as CFO as of February 1, 2022.
previously for Holland Colours on an interim basis.
Finally, the initial four-year term of employment of the CEO and CTO expire at this year’s
renewal of both contracts for a further period of four years.
BOARD MEETINGS AND CONTACTS
with the COVID-19 rules applicable at each particular time. We discussed the impact of
strategic programs such as the Business Process and IT program and sustainability.
In addition, the Supervisory Board held several meetings at which the Board of
Management was not present. The topics of these meetings included an evaluation of the
company’s strategic development, remuneration policy, risk matrix and relationships with
Holland Pigments and other large shareholders.
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DEVELOPMENTS AND STRATEGY
developments, the demand for Holland Colours’ products remained very strong in all areas
operational costs in line with its planned ongoing investments in longer term strategic
programs, such as those involving improvements in IT and other systems, and in new
production technologies.
Continuing investment
A major concern throughout the year was the availability of the raw materials on which
with these issues required extremely close and constant monitoring and the application of
to continuously improve production processes and develop new products. Likewise, the
new, state-of-the-art IT systems in which the company is investing will be essential. These
systems support more advanced business processes and will therefore enable the
over them. The Supervisory Board recognizes the need to develop these important
programs and supports the company in doing so. Because of this, the Supervisory Board
accepts the increase in operating costs related to this in the coming years. At the same
time, this makes it even more crucial that Holland Colours focuses on realizing its very
Risk Matrix
The Supervisory Board and Board of Management held extensive discussions over the
identifying possible risk factors, especially new or emerging ones, assessing their potential
impact on the organization and identifying the steps the company can take to minimize
their potential impact. This was a more extensive exercise than the regular annual reviews
emphasis on sustainability, political and fraud risks since the last major update.
Fraud/Code of Conduct
Fraud is an issue Holland Colours’ management and the Supervisory Board take very
seriously. Last year, the Board of Management was informed by local management of
some payments at Holland Colours Asia that, while permissible under local rules, were in
more information.
Russia/Ukraine
In March 2022, Holland Colours announced it had halted all new business developments in
sanctions, Holland Colours decided that it is willing to continue to sell to existing clients.
Ukraine. The main clients are in the building & construction and food packaging industries.
mineral water bottles. Holland Colours will continue to follow the situation closely and
remain fully in line with EU sanctions.
Focus on sustainability
On a happier note, the Supervisory Board is pleased to see that the steps the company
took in 2020/2021 to approach sustainability as a strategic business opportunity were
sustainability of its organization and products. The trend towards recyclable plastics is
irreversible and it is both good business and good for the planet for Holland Colours to
contribute to this wherever it can.
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSSUPERVISORY BOARD REPORT
Move to ‘one company’
Companies that operate in global markets are greatly strengthened when organizations
operate as one group. This can involve a greater role for the center, but there are also
examples of companies where a local location takes the lead in coordinating and working
worldwide. In this light it is good to see that Holland Colours is increasingly adopting a ‘one
company’ mindset and way of working. Examples include improving IT through a location
by location rollout, the global and local sustainability programs and the global employee
survey. This move to one company with shared processes and local production, sales and
distribution centers will, the Supervisory Board believes, enable Holland Colours to pool its
resources and skills, move more quickly in response to changing client demands, and so
punch above its weight in an increasingly competitive market.
RISK MANAGEMENT
As with the company’s strategy, COVID-19 dominated the discussions with the Board of
and fraud risks within Holland Colours.
One thought-provoking conclusion to emerge from the COVID-19 pandemic was to remind
us that risk extends beyond our own organization. We naturally tend to consider risks and
risk management in terms of our own operational environment. But, as COVID-19 has
of control. The good news is that COVID-19 has proven that Holland Colours’ conservative
As in other years, but with arguably more rigor because of the exceptional uncertainties,
the Board of Management and Supervisory Board considered the company’s exposure to
major accounts and clients. Please refer to the Risk Management section in the report of
the Board of Management for a complete overview, including risk-mitigating measures.
subsequently, with the full Supervisory Board in the presence of the Board of Management
and the auditor. PwC Accountants has issued a management letter and Board Report on
improvement, which are being implemented.
PERFORMANCE EVALUATION
While many Supervisory Board meetings were held virtually last year, because of COVID-19,
the board did meet in person to evaluate its own performance and priorities. We also
discussed the performance of the Board of Management and progress in implementing
a fuller explanation of the changes that will be introduced.
ALLOCATION OF DUTIES
The allocation of duties and procedures in the Supervisory Board are set out in the
a member of the Supervisory Board and a schedule of retirement from the board are
Code stipulates that a diversity policy must be in place, and this will continue to be
considered for future appointments, with quality remaining the most important criterion.
who is the Supervisory Board member proposed by Holland Pigments BV.
AUDIT COMMITTEE
Last year, Holland Colours NV was informed by the local management of PT Holland
Colours Asia about potential irregular payments. They were instructed to stop these
payments at once. The Audit Committee of the Supervisory Board played an important role
in coordinating an investigation by outside legal counsel into these commission payments
in Indonesia.
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The investigation has found evidence of payments made to employees of a small number
a period of eight years and adding up to a total sum of approximately USD 16,000 to
USD 75,000 per year. The payments were recorded in PT Holland Colours Asia’s accounts,
but the administration was not done correctly. The payments themselves did not violate
Indonesian law. Following the discovery and investigation, the company has prepared and
partly executed a remediation plan to make sure that similar incidents do not occur again.
For more details regarding the remediation actions and plans reference is made to the
Risk Management section and the paragraph headed ‘Risk-related events 2021/2022’ of
the Report of the Board of Management. The Supervisory Board fully supports these
measures.
Separately, the Audit Committee monitored the execution of the plans to update
Holland Colours’ IT systems, especially regarding data management and information
management to support improved business analysis. The Audit Committee further
company’s tax position and policy.
REMUNERATION COMMITTEE
of the new Long-Term Incentive Plan that will form part of the variable remuneration of
advice. You can read more about this in the Remuneration Report but, in brief, the move
aims to stimulate long-term value creation in innovation and sustainability.
The introduction of a Long-Term Incentive Plan alters the way the current Short-Term
Incentives plan operates. However, the total variable remuneration that may be paid
– up to three times the monthly salary – remains the same. The Supervisory Board will
each year.
The current variable bonus scheme will apply for 2021/2022. In addition to this bonus,
plan applies to all the group’s employees and is linked to the return on investment of
Holland Colours NV and the net operating result of the division of the employee concerned.
salary. Where applicable, variable pay for the previous year is paid in July of the following
year.
We believe that the remuneration of the Board of Management is in line with Dutch market
conditions. The details of the remuneration of the Board of Management and the
statements, Related Parties.
ANNUAL REPORT AND DIVIDEND PROPOSAL
Board of Management and the external auditor.
both meet the requirements of transparency and form a sound basis for the Supervisory
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSSUPERVISORY BOARD REPORT
Thankfully, the COVID-19 pandemic seems to have had less of an impact over the past
plus shortages of important raw materials and general political and economic instability
While Holland Colours has shown that it can successfully manage its margins despite
sudden changes in trading conditions, the outlook remains highly uncertain. On the other
earnings, resulting in a dividend payment of € 5.91 per share.
discharge from liability to the members of the Board of Management and the Supervisory
The members of the Supervisory Board have signed the Financial Statements and have
accordingly discharged their statutory obligation pursuant to Section 101, subsection 2
of Book 2 of the Dutch Civil Code.
ACKNOWLEDGEMENTS
The Supervisory Board would like to express its appreciation of the work done by
the management and employees of Holland Colours during another challenging year.
The company’s resilience, adaptability and people’s willingness to work as a team and go
all Holland Colours’ clients, suppliers, shareholders and employees for their continued
support and trust in the company.
Apeldoorn, May 25, 2022
Supervisory Board
Roland Zoomers, Chairman
Aukje Doornbos
Jorrit Klaus
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REMUNERATION REPORT
Remuneration of the Board of Management
top management who will enable Holland Colours to achieve its strategic and operational
goals. Their remuneration is guided by the Remuneration Committee. This advises the
Supervisory Board on the formulation of the remuneration policy and on the level of the
individual remuneration of the Board of Management.
Dutch Law incorporates the EU Shareholders’ Rights Directive and the company’s
Remuneration Policy is in line with this legislation (Article 2:135a DCC). The Remuneration
Policy is evaluated at least once every four years. For more information about Holland
Colours’ Remuneration Policy, please visit the corporate website.
This remuneration report referred to in Book 2: 135b DCC for 2021/2022 will be put
REMUNERATION FRAMEWORK
The remuneration policy is intended to encourage enterprising behavior. At the same time,
it must also be in reasonable proportion to the remuneration of the other management
personnel. Holland Colours’ remuneration policy is appropriate to its identity and strategy
and is result-oriented and straightforward in its application. It also takes account of the
social context, the corporate governance structure and the interests of Holland Colours
shares, Holland Colours does not provide for long-term variable remuneration in the form
share price is not an element in the remuneration policy. The company does however
long-term achievements. See later in this report for a fuller explanation of the changes.
Holland Colours benchmarks the salaries of the company’s senior management with the
level compared to companies of similar size, international scope and complexity and
located in the same geographical area. The salaries of our employees are reviewed
annually, and we conduct a job evaluation and rating process. In adopting this approach,
Holland Colours ensures fair pay compared to other comparable companies.
In 2021/2022, the internal pay ratio was 9.91 (2020/2021: 10.65) based on the annual total
remuneration of the CEO and the average total remuneration of all other full-time
employees, as reported in accordance with IFRS, excluding discretionary elements.
2021/2022 consisted of:
•
•
Pension based on a defined contribution system;
•
Other employment benefits (reimbursement of specific expenses or contribution and a
company car):
– Variable remuneration: in cash for short-term achievements (one year);
Claw-back and ultimate remedial provisions are subject to the Dutch Civil Code.
Members of the Board of Management have a change-of-control arrangement and in the
case of an early termination of their contract they are covered by a severance provision of
Code. Holland Colours does not provide any personal loans, guarantees or advance
payments to the members of the Board of Management. The Supervisory Board sets
year.
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSREMUNERATION REPORT
on Investments for Holland Colours. The basis is the monthly gross compensation
excluding holiday allowance, to a maximum remuneration of one and a half months,
shares of Holland Pigments.
SCENARIO ANALYSES
The Supervisory Board and the Remuneration Committee use scenario analyses in the
formulation and establishment of the remuneration of the Board of Management as stated
Management’s variable remuneration. The Remuneration Committee evaluates the total
remuneration of the Board of Management each year to ensure that the package
INDIVIDUAL REMUNERATION OF THE BOARD OF MANAGEMENT
(amounts x € 1,000 unless stated otherwise)
Board of Management
Fixed
remuneration
Non-recurring
remuneration
Variable
remuneration
Total
remuneration
Base
salary
Pension
plan
Non-recurring
payment Variable
Proportion of variable
remuneration (in %)
Coen Vinke CEO 27 92 20
Tanja van Dinteren CFO 200 17 96
1
357 12
Eelco van Hamersveld CTO 193 20 77 290 27
Total 727 64 96 213 1,100 19
1
Included for 10 months
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CHANGES IN THE REMUNERATION PER MEMBER OF THE BOARD OF
MANAGEMENT AND COMPANY PERFORMANCE
(amounts x € 1,000 unless stated otherwise)
Annual change Fixed and variable
2021/22
20/21
> 21/22
19/20
> 20/21
18/19
> 19/20
17/18
> 18/19
Board of Management
remuneration
Coen Vinke (CEO) (1) (2)
1
–
Tanja van Dinteren (CFO) 357 129 – – –
Eelco van Hamersveld (CTO) 290 27 29 –
Company performance
EBITDA 13,677 10,672
EPS (in € x 1) 12 11 9 7 7
Average remuneration on a
full-time equivalent basis of
employees (2) 3
Number of employees of the group
1
Included for 11 months
Introduction of a Long-Term Incentive Plan
in 2022/2023
The move to include a long-term incentive element in the payment to the Board of
By encouraging the establishment of long-term incentives, the Code aims to stimulate
longer is also possible, and performance payments can be made at the end of the period
or at milestone points en route. As Holland Colours has always thought long-term, this
change aligns how the Board members are rewarded with the existing commitment to
shareholder value, innovation and improving sustainability.
A key thing to note is that under the new Long-Term Incentive plan, the maximum
amounts that can be paid as an incentive (short and long term) to members of the Board
of Management will not change. What will change is the basis on which those incentive
and if so, how much. The mechanism for doing this is a so-called incentive multiplier.
targets for the Board of Management each year. These targets will be based on the overall
strategic group objectives for that year. In addition, the Supervisory Board has set long term
environmental and sustainability goals, like CO
2
reduction and innovation. The progress
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSREMUNERATION REPORT
Request for adoption
remuneration of the Supervisory Board in accordance with this proposal and that it will
remuneration policy as well as the date and outcome of the policy vote will be made public
policy will remain in force and the Supervisory Board will submit a new proposal at the
CHANGES IN THE INDIVIDUAL REMUNERATION OF THE SUPERVISORY BOARD
OVER THE LAST 5 YEARS
(amounts x € 1,000)
Annual change 2021/22
20/21
> 21/22
19/20
> 20/21
18/19
> 19/20
17/18
> 18/19
Roland Zoomers – – – –
26 – – – –
Aukje Doornbos 26 – – – –
Jorrit Klaus 26 – – – –
Total 116 – – – –
and assessed per topic by the Remuneration Committee for each individual Board of
Management member on behalf of the Supervisory Board. The achievement of the
per topic by the Remuneration Committee on behalf of the Supervisory Board.
A full explanation of the new Long-Term Incentive components, its relation to Short-Term
Incentives and Board of Management remuneration as a whole, can be found in the
Remuneration Policy available at www.hollandcolours.com.
REMUNERATION OF THE SUPERVISORY BOARD
The Dutch Act implementing the revised Shareholders Directive also includes a
requirement to establish a remuneration policy for the Supervisory Board. The
remuneration of the members of the Supervisory Board encourages them to perform their
time spent and the responsibilities relating to their position. A remuneration benchmark is
evaluated on a regular basis to establish whether the remuneration of the members of the
Supervisory Board is still appropriate or requires adjustment. The remuneration does not
include the award of shares or options on shares. Holland Colours does not provide any
personal loans, guarantees or advance payments to the members of the Supervisory
Board.
The last adjustment of the remuneration of the Supervisory Board was in 2013. As a result,
the level of remuneration has fallen to less than the targeted median-level benchmark of
comparable peers. The Supervisory Board therefore proposes to adjust the remuneration
for the chair and € 32,000 for each other member of the Supervisory Board.
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Employee participation is central to the way we manage our company
and is the foundation of our success. You can read more about the culture
it supports in our story on page 15. Here we are going to look at how
co-ownership works.
Every permanent employee of Holland Colours owns shares (at least one) in Holland
Pigments BV,
are the majority shareholders, and they are committed to actively supporting the
employee-shareholder model.
The goal of Holland Pigments and the four majority shareholders is to promote the
stability, continuity and independence of Holland Colours, including eective
employee participation within the Holland Colours Group. To do this, the four main
and ensuring those shares remain within Holland Pigments. They also sell shares to
employees if there are not enough available from other employee-shareholders to meet
demand.
Holland Pigments holds the majority (50.52%) of the shares in
Holland Colours.
The Holland Colours shares are traded on the Euronext Amsterdam stock exchange.
Holland Pigments is managed by a one-tier board (Holland Colours itself has
a two-tier board – Management Board and Supervisory Board), made up of a
chairperson (rotates each year), four non-executive members and an executive director.
The collective shareholding of our employees is represented by a non-executive Holland
Pigments Board member who works for Holland Colours. This person is elected by the
company’s employees every four years.
The non-executive board member for employee-shareholders and the executive
director of Holland Pigments are jointly responsible for managing the employee-
shareholder model properly. To help with this, each Holland Colours site elects and
member for employee-shareholders and the executive director of Holland Pigments visit
the various Holland Colours sites regularly to discuss employee participation.
This structure helps to underpin the independence and continuity of the company. It also
supports and enables the unique co-ownership culture that makes working at Holland
Colours unlike working anywhere else.
EMPLOYEE PARTICIPATION IN PRACTICE
Every permanent employee owns part of Holland Colours
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSEMPLOYEE PARTICIPATION
“Employee
Participation
drives our
success”
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TEAMWORK AND OUR MARKETS
Holland Colours doesn’t make end products. We don’t
make packaging. We don’t manufacture building
materials. We don’t produce coatings or sealants.
Instead we make the concentrates of colorants and
additives that add beauty and functionality to other
company’s end products. We also create concentrates
of additives that make plastic products easier to
manufacture, more sustainable and which give them
multiple lives.
INTERNALLY AND
EXTERNALLY
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Strictly speaking, we are a supplier, but Holland Colours has always
acted as a team player and co-designer with our clients. However,
where in the past teamwork focused primarily on creating
tailor-made solutions for individual clients, today we also aim to
team up with the marketplace as a whole.
BIG CHALLENGES, BIG OPPORTUNITIES
The reason is simple: the marketplace is changing. Today’s
opportunities and challenges are bigger and wider than one
company. Sustainability and circularity are clear examples.
to work together as a value chain to meet upcoming regulations,
to innovate and to ensure that the plastic waste we create is worth
recycling or upcycling. That it has value. Regulation is another
example. In a globalized world, the strictest health and safety rules
tend to become the model for the world. Brand owners adopt
these requirements and implement them globally at a pace that
is often faster than regional authorities require. Holland Colours
supports brand owners in this global transition through our
innovative portfolio and global footprint.
Holland Colours’ commercial and technology teams in packaging,
building & construction and sealants & coatings play a central role
in helping our company to understand and support the trends
and drivers in the market, the value chain and among key decision
makers. They also help our clients to understand changes in the
market. For example, when the EU was talking about limiting the
amount of titanium dioxide in plastic bottles, we set up seminars
to share what we knew about the proposals and their likely impact
had they come into force. We are also a member of industry
associations like Petcore, NAPCOR and VinylPlus, and we are
joining industry consortia like InReP, to contribute to plastics
recycling. We also work with universities and institutes.
MORE MARKET PULL, LESS TECHNOLOGY PUSH
On a more day to day level, the whole company aims to operate
as a team to meet client needs. This approach to innovation works
in two directions. Initially, Holland Colours used its technical
and our clients – technology push based on internal ideas. Today,
the company’s strategy is to work outside-in as well. This means
identifying unmet market needs and then feeding those ideas to
our product development teams so they can look for potential
solutions – market pull based on market-focused teamwork. Our
teams perform market assessments and connect within our value
chain, from raw material manufacturers to brand-owners. This
allows us to work on the right product development projects.
In both cases, we look to team up early with clients, suppliers
and others in the value chain. This enables us to share our ideas
and work-in-progress, and so move faster to commercialization.
It helps us to stay on track and build an ultimately winning
business case for our clients and for Holland Colours.
THINK GLOBAL AND LOCAL
share knowledge and replicate technologies between our
locations in EMEIA (Europe, Middle East, India and Africa) the
Americas and Asia. In this way, we ensure that our teams are
aligned and that everyone knows what is happening elsewhere
in the world, internally and externally.
“Holland Colours’
commercial and
technology teams help
us to understand and
support the trends and
drivers in the market,
the value chain and
among key decision
makers”
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FIVE-YEAR SUMMARY
IN MILLIONS OF EUROS, UNLESS STATED OTHERWISE
2021/22 2020/21 2019/20 2018/19 2017/18
Income statement
Revenue 110.5 96.0 101.5 90.9
Operating result before depreciaton
and amortisation (EBITDA)
17.0 15.5 13.7 10.7 10.2
Depreciation of property, plant,
equipment and intangibles
(3.3) (3.1) (2.9) (1.9) (2.0)
Operating result 13.6
Interest (0.1) (0.1) (0.1) (0.1) –
Income tax (3.3) (2.3) (2.2)
Result of discontinued operations – – (0.0) (0.2) (0.1)
Net result 10.2 9.6 7.9 6.1 5.9
Statement of nancial position
Total assets 79.6 63.2 50.2
Total equity 50.6 36.7
Interest-bearing debt – – – – –-
Working capital
1
26.0 19.6 21.3 17.2
Invested capital
2
39.9 36.6 32.6
Cash 17.0 16.6 7.7 5.3
2021/22 2020/21 2019/20 2018/19 2017/18
Statement of cash ows
7.7 3.3
Investments (3.3) (2.0) (2.9) (2.5)
Dividend (3.9) (3.0) (2.9) (2.6)
3
0.3 (0.5) 0.2
0.3 9.0 0.2 2.1 (2.2)
Revenue per division
EMEIA 53.2
Americas (in USD) 37.9 36.1
Asia (in USD) 16.6 17.2 17.2
Ratios
Return on Sales (ROS)
Solvency
Return on Investment (ROI)
5
Market capitalisation as at March, 31 106.7 65.7 76.6
Number of shares outstanding
Inventories + trade accounts receivable -/- trade accounts payable
2
Property, plant & equipment, intangible assets, other investments -/- non interest bearing current liabilities
3
5
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSFIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORT
INVESTOR RELATIONS
circumstances caused by COVID-19, we would like to adhere to this baseline. We therefore
Publications
The interim results (for the period April to September) are published in October and the
full-year results (from April to March) are published by the end of May/beginning of June.
Company non-public information is published in the form of press releases which are also
posted on our website and social media.
Liquidity Provision
makes no use of a liquidity provision and sponsored research services. We assessed the
pros and cons of these services at the end of calendar year 2020 and decided to continue
without.
Share Ownership
Shares traded on Euronext Amsterdam
Holland Pigments BV
1
Registered shares
Total 860,351
the registers of the AFM (Netherlands Authority for the Financial Markets) based on
the Decree on the Disclosure of Major Holdings and Capital Interests in Issuing
Institutions in accordance with the Netherlands Financial Supervision Act.
Disclosures % Date
Holland Pigments BV
1
50.03 April 2, 2012
6.97
ELNED Holding BV 5.00
P. Chr. Van Leeuwen Beheer BV 5.06 August 7, 2019
Axxion S.A. January 21, 2022
1
of the shares in Holland Colours NV.
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SHARE PRICES – HOLLAND COLOURS VERSUS ASCX
April 1, 2021 = 100
60
80
100
120
140
160
180
200
220
04 05 06 07 08 09 10 11 12 01 02 03
Holland Colours NV
ASCX Index
2021 2022
Key data per share
In euros, unless stated otherwise 2021/2022 2020/2021 2019/2020 2018/2019 2017/2018
Net result 11.00 9.09
Final dividend 5.91 5.50 0.00 3.52 3.39
Interim dividend 0.00 0.00 0.00 0.00
Equity
Highest share price 199.00 125.00 111.00
Lowest share price 121.00 76.00 66.25
Number of shares outstanding
SHARE PRICES – HOLLAND COLOURS
In euros
HOLLAND COLOURS ANNUAL REPORT 2021/2022
76
90
40
140
190
240
04 05 06 07 08 09 10 11 12 01 02 03
2021 2022
90
40
140
190
240
04 05 06 07 08 09 10 11 12 01 02 03
2021 2022
90
40
140
190
240
04 05 06 07 08 09 10 11 12 01 02 03
2021 2022
CSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTSFIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORT
Publications (presented to AFM)
October 22, 2021 Publication of interim results 2021/2022
January 6, 2022 Holland Colours announces resignation of CFO
March 10, 2022 Holland Colours strengthens compliance with its Code of Conduct
Key dates (indicative)
October 21, 2022 Publication of interim results 2022/2023
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INTERNAL TEAMWORK
Teamwork was one of the reasons the founders decided to
set up Holland Colours in the rst place. Having previously
worked for a big corporate owner, they wanted to build a
business in which employees were involved and where
collective responsibility and commitment were central.
A business in which people worked together, helped each
other and did what was needed to develop the best product
or to meet a challenging deadline.
ALL FOR ONE AND
ONE FOR ALL
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It worked and today, teamwork is one of our core values and very
much the basis for our other business drivers: responsibility,
proactiveness, competence and accountability. Teamwork is
central to our success today, just as it always has been. It is
helping us to innovate across our markets and to push our
sustainability agenda. At the same time, it also means that we
are there for each other when colleagues are having a hard time,
or when the business faces economic headwinds.
EVERYONE BENEFITS WHEN EVERYONE IS INVOLVED
People who connect with this way of working feel an extra
commitment to their colleagues and our clients. This is reinforced
by our employee-participation model. Everyone is involved in what
is happening across the company, and not only in their own
As a company, we have no written rules about teamwork.
Instead, you see a colleague helping someone else or being
helped, and you follow the example. It’s also part of people’s DNA.
We don’t run courses on teamwork. However, we do select and
hire people who are down to earth and willing to roll their sleeves
up to get something done. We tell managers that we have an
entrepreneurial mindset, so you might also have to do things that
are not your immediate area of responsibility. Enjoy that and you
CAMARADERIE BENEFITS OUR CLIENTS
The result is a workplace in which everyone is genuinely interested
in each other. For a lot of people, their colleagues are like family
and social activities are an important part of working at Holland
Colours. Even during the height of the COVID-19 pandemic, we
found ways to maintain the social side – by sharing photos of our
regularly come together to celebrate personal anniversaries,
company milestones and just for the fun of it.
This camaraderie adds real value for our clients. It makes us more
aligned around meeting client needs and it supports collaboration
and co-design between the client and our sales and technology
teams. Just as we do internally, we like to build long and strong
relationships with our clients. Many of our products begin as
collaborative projects and we are always willing to share our
knowledge to help the client improve or optimize a production
process. Basically, if a client is involved, everyone joins in and
works together to develop a product solution or deliver an
improvement to a production process.
SHIFTING TO A GLOBAL TEAMWORK MINDSET
Teamwork is also driving the changes we are making to become
one organization. Investments in global IT business processes and
company-wide programs in HR, safety and others will help us to
work together as one team globally. By taking steps to structure
and optimize the way we work together, we will be in a better
position to choose where, how and when we can add the most
value for our clients. This will also ensure that we preserve what’s
unique about HCA in the future.
Teamwork is the future of Holland Colours, just as it always has
local organizations and more emphasis on acting as one – but the
essence will remain the same. Teamwork. But on a bigger scale.
“We have no
written rules about
teamwork. Instead,
you see a colleague
helping someone
else or being helped,
and you follow the
example”
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FINANCIAL
STATEMENTS
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
80
HOLLAND COLOURS ANNUAL REPORT 2021/2022
80
Consolidated Income Statement 82
Consolidated Statement of Comprehensive Income 83
Consolidated Balance Sheet 84
Consolidated Statement of Changes in Equity 85
Consolidated Cash Flow Statement 86
Notes to the Consolidated Financial Statements 87
1. General Information 87
2. Impact Covid-19 and the situation in Ukraine on
the Financial Statements 87
3. Summary of Accounting Principles 88
4. Financial Risk Management 95
5. Cash Flow Statement 96
6. Segment Information 96
7. Revenue 98
8. Personnel Expenses 98
9. Other Operating Expenses 98
10. Finance Income and Expense 99
11. Income Tax 99
12. Intangible Assets 100
13. Property, Plant and Equipment 101
14. Right-of-Use Assets 102
15. Deferred Income Tax Assets and Liabilities 102
16. Inventory 103
17. Trade and Other Receivables 104
18. Cash and Cash Equivalents 105
19. Share Capital 105
20. Other Reserves 105
21. Earnings per Share 105
22. Non-Controlling Interest 106
23. Credit Facility 106
24. Lease Liabilities 106
25. EmployeeBenetObligations 107
26. Trade and Other Liabilities 108
Other Disclosures 109
27. Contingent Assets and Liabilities 109
28. Related Parties 109
29. Other Disclosures 111
Company Income Statement 112
Company Balance Sheet 113
Notes to the Company Financial Statements 114
30. General Information 114
31. Summary of Accounting Principles 114
32. Subsidiaries 114
33. Personnel Expenses 114
34. Income Tax 114
35. Intangible Assets 115
36. Property, Plant and Equipment 116
37. Right-of-Use Assets 117
38. Financial Non-Current Assets 117
39. Equity 118
40. Credit Facility 118
41. Lease Liabilities 118
42. EmployeeBenetObligations 119
43. Audit Fees 119
44. Other Disclosures 120
Other Information 121
StatutoryProvisionsregardingtheAppropriationofProts 121
Independent Auditor’s Report 122
CONTENTS
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
81
In thousands of euros Note April 1, 2021/March 31, 2022 April 1, 2020/March 31, 2021
Revenue 7 110,465 96,029
Cost of Materials (58,827 ) (49,781 )
Direct Contribution Margin 51,638 46,248
Personnel Expenses 8 (22,370 ) (19,939 )
Amortization and Impairments 12 (87 ) (124 )
Depreciation and Impairments 13/14 (3,325 ) (2,935 )
Other Operating Expenses 9 (12,226 ) (10,834 )
Total Operating Expenses (38,008 ) (33,832 )
Operating Result 13,630 12,416
Finance Income 10 94 22
Finance Expense 10 (180 ) (97 )
Finance Income and Expense (86 ) (75 )
Result Before Income Tax 13,544 12,341
Income Tax 11 (3,301 ) (2,762 )
Net Result from Continued Operations 10,243 9,579
Attributable to:
•
Shareholders of the Company 10,179 9,471
•
Non-Controlling Interest 22 64 108
Earnings per Share in euros
Average Number of Shares Issued 21 860,351 860,351
Earnings per Share from Continued Operations 11.83 11.00
Earnings per Share from Total Net Result 11.83 11.00
CONSOLIDATED
INCOME STATEMENT
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2022
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
82
Notes1to29areanintegralpartoftheseconsolidatednancialstatements.
In thousands of euros Note April 1, 2021/March 31, 2022 April 1, 2020/March 31, 2021
Net Result 10,243 9,579
Items that will not be reclassied to the Income Statement
ActuarialResultsonEmployeeBenets,afterTax 25 82 (8 )
Other Comprehensive Income that could in future
be classied to the Income Statement
ForeignCurrencyTranslationDierences 20 1,558 (2,134 )
Other Comprehensive Income 1,640 (2,142 )
Total Comprehensive Income 11,883 7,437
Attributable to:
•
Shareholders of the Company 11,804 7,329
•
Non-Controlling Interest 79 108
CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2022
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
83
Notes1to29areanintegralpartoftheseconsolidatednancialstatements.
CONSOLIDATED
In thousands of euros Note
March 31,
2022
March 31,
2021
Non-Current Assets
Intangible Assets 12 69 156
Property, Plant and Equipment 13 20,817 19,354
Right-of-Use Assets 14 1,247 1,616
Deferred Tax Assets 15 1,415 1,319
Long-Term Receivables – 60
Current Assets
Inventory 16 20,598 12,604
Trade and Other Receivables 17 18,145 16,647
Income Tax Receivables 366 331
Cash and Cash Equivalents 18 16,959 16,638
Total Assets 79,616 68,725
In thousands of euros Note
March 31,
2022
March 31,
2021
Equity
Share Capital 19 1,953 1,953
Share Premium Reserve 1,219 1,219
Other Reserves 20 (18 ) (1,633 )
Retained Earnings 54,176 48,719
Equity Attributable to Shareholders of the Company 21 57,330 50,258
Non-Controlling Interest 22 420 341
Total Equity 57,750 50,599
Non-Current Liabilities
Lease Liabilities 24 744 956
Employee Benet Obligations 25 1,105 1,093
Deferred Tax Liabilities 15 273 189
Current Liabilities
Lease Liabilities 24 535 643
Trade and Other Liabilities 26 17,392 13,615
Income Tax Liabilities 1,729 1,546
Employee Benet Obligations 25 88 84
Total Equity and Liabilities 79,616 68,725
BALANCE SHEET
AS OF MARCH 31, 2022
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
84
Notes 1 to 29 are an integral part of these consolidated nancial statements.
In thousands of euros Equity attributable to Shareholders of the Company
Share
Capital
Share
Premium
Reserve
Legal
Reserve for
Currency
Translation
Legal
Reserve
for Hedge
Legal
Reserve for
Intangible
Assets
Retained
Earnings Total
Non-
Controlling
Interest
Total
Equity
As at March 31, 2020 1,953 1,219 735 (353 ) 226 43,064 46,844 233 47,077
Net Result for the Financial Year – – – – – 9,471 9,471 108 9,579
Other Comprehensive Income – – (2,134 ) – – (8 ) (2,142 ) – (2,142 )
Total Comprehensive Income – – (2,134 ) – – 9,463 7,329 108 7,437
Transfer of Reserve for Intangible Assets – – – – (107 ) 107 – – –
Dividends Paid – – – – – (3,915 ) (3,915 ) – (3,915 )
As at March 31, 2021 1,953 1,219 (1,399 ) (353 ) 119 48,719 50,258 341 50,599
Net Result for the Financial Year – – – – – 10,179 10,179 64 10,243
Other Comprehensive Income – – 1,543 – – 82 1,625 15 1,640
Total Comprehensive Income – – 1,543 – – 10,261 11,804 79 11,883
Transfer of Reserve for Intangible Assets – – – – 72 (72 ) – – –
Dividends Paid – – – – – (4,732 ) (4,732 ) – (4,732 )
As at March 31, 2022 1,953 1,219 144 (353 ) 191 54,176 57,330 420 57,750
CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2022
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
85
Notes 1 to 29 are an integral part of these consolidated nancial statements.
In thousands of euros Note
April 1,
2021/
March 31,
2022
April 1,
2020/
March 31,
2021
Capital Expenditures in Intangible Assets 12 – –
Disposal of Property, Plant and Equipment 12 26 –
Capital Expenditures in Property, Plant and
Equipment 13 (3,346 ) (1,953 )
Cash Flow used in Investment Activities (3,320 ) (1,953 )
Dividends Paid (4,732 ) (3,915 )
Cash Flow used in Financing Activities (4,732 ) (3,915 )
ExchangeRateandTranslationDierences
on Cash and Cash Equivalents 362 318
Net Cash Flow 321 8,972
Cash and Cash Equivalents as at April 1 16,638 7,666
Cash and Cash Equivalents as at March 31 16,959 16,638
Net Cash Flow 18 321 8,972
In thousands of euros Note
April 1,
2021/
March 31,
2022
April 1,
2020/
March 31,
2021
Operating Result 13,630 12,416
Adjustments for:
•
Amortization of Intangible Assets and
Impairments 12 87 124
•
Depreciation of Property, Plant and Equipment
and Impairments 13 2,314 2,310
•
Depreciation of Right-of-Use Assets 14 1,008 625
•
IFRS 16: reversal of lease costs (921 ) –
•
Changes in Provisions 25 (17 ) 44
•
Exchange Rate Differences 253 20
Cash Flow generated from Operating Activities before
changes in Working Capital, Tax and Interest 16,354 15,539
Changes in Working Capital (5,715 ) 1,066
Income Tax Paid (2,594 ) (2,008 )
Interest Received 94 22
Interest Paid (128 ) (97 )
Cash Flow generated from Operating Activities 8,011 14,522
CONSOLIDATED
CASH FLOW STATEMENT
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2022
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INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
86
Notes1to29areanintegralpartoftheseconsolidatednancialstatements.
1. GeneralInformation
liability company (‘Naamloze Vennootschap ’) under
DutchlawwithitsregisteredoceinApeldoorn,
the Netherlands .
The company and its subsidiaries (‘the Group’),
manufacture, distribute and sell color concentrates.
As of the balance sheet date, the Holland Colours Group
operates through eight of its own facilities and a network
of agents and distributors.
Shares of the company are listed on the Euronext stock
exchange in Amsterdam.
Since April 2, 2012, just over 50% of the shares in
investment company Holland Pigments BV , in which, along
with others, all employees of Holland Colours participate.
The employees collectively hold approximately 25% of
the shares in Holland Pigments BV. Participations held in
Holland Pigments by former directors (who are also major
shareholders in Holland Pigments) are excluded from this
number.
TheGroup’snancialyearcommencesonApril1and
closes on March 31 of the following year.
TheconsolidatedIFRSnancialstatementsofthe
companycomprisethenancialstatementsof
the company and its subsidiaries.
On May 25, 2022, the Board of Management authorized
thenancialstatementsforissue.Thenancialstatements
as presented in this report are subject to adoption by the
Annual General Meeting of Shareholders on July 7, 2022.
2. ImpactCovid-19andthe
situation in Ukraine on the
Financial Statements
COVID-19
As in the previous year, Holland Colours monitored the
COVID-19 situation in the organization, the conclusion
being that it has become less anxious about it over time.
COVID-19 made it hard for us to interact with customers,
and we saw that most companies were primarily focused
on maintaining production and meeting demand, and less
focused on what is new or next. Covid-19 had a limited
impact on the company’s revenues and it has not
impacted our going-concern assumption.
Holland Colours has a strong balance sheet, a solid cash
positionandgeneratespositiveoperationalcashows.
Asmentionedearlier,Covid-19hadalimitedeectonour
businessandnancialperformance.Wemonitoredclosely
our customers and working capital and saw no indications/
reasons to take any actions.
The impact of the pandemic on the Financial Statements
has been considered for each of the relevant notes, and
additional disclosures have been provided if COVID-19
hadamaterialimpactonaspecicFinancialStatements
section.Inour2021/2022gures,allCOVID-19related
impacts have been treated as normal results from
operations.
THE SITUATION IN UKRAINE
The situation in Ukraine had no material impact on the
company’s results for the year. Ukraine, Russia and
Belarus form only a modest part of our business (around
4% of total Holland Colours group revenues), and we have
no own operations there. We have decided to halt all
market and business development in Russia and Belarus,
but to continue to supply existing clients in line with
EU sanctions. We continue to monitor the situation closely
and will follow the applicable international laws and
regulations regarding sanctions.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
IN THOUSANDS OF EUROS, UNLESS STATED OTHERWISE
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
87
3. SummaryofAccountingPrinciples
GENERAL
TheconsolidatednancialstatementsarepreparedinaccordancewithInternational
Financial Reporting Standards (IFRS) as adopted by the European Union and with Title 9
Book 2 of the Dutch Civil Code.
Theconsolidatednancialstatementsarepresentedinthousandsofeuros,roundedto
the nearest thousand, unless stated otherwise.
Theconsolidatednancialstatementsarepreparedonthebasisofhistoricalcost.
The accounting policies as detailed below are applied consistently for all periods presented
intheseconsolidatednancialstatements.
OPERATING SEGMENTS
We determine and present operating segments based on the information that is used by
the Board of Management. The segmentation is divisional, based on the regions in which
theGroupoperates.Inturn,theseregionsreecttheGroup’smanagementandinternal
reporting structure. Segmentation based on markets in which the Group operates requires
signicantlymoreprotallocation.Thisisbecauseseveralproductsaresoldinmorethan
onemarket,whichmakesthecostforaccountingineective.
IFRS CHANGES
BelowarethechangesintheIFRSstandardsthathavebeenissuedandbecameeective
as of January 1, 2021. These changes do not have a material impact on the Group.
IFRS Topic Eective date
IFRS 16 Leases: COVID-19 related rent concessions
– extension of the practical expedient.
Annual periods beginning
on or after April 1, 2021.
IFRS 7, IFRS 4
and IFRS 16
Amendments to interest Rate Benchmark
Reform – Phase 2.
Annual periods beginning
on or after January 1, 2021.
NewstandardsthatbecomeeectiveforHollandColoursafterthe2021/2022nancial
year are not included with early adoption. The IFRS standards shown in the table below will
becomeeectiveforHollandColoursafterMarch31,2022.Theimpactofthesechanges
on the Group is expected to be limited.
IFRS Topic Eective date
IFRS 3, IAS 16,
IAS 37, IFRS 1,
IFRS 9, IAS 41
and IFRS 16
A number of narrow-scope amendments
to IFRS 3, IAS 16, IAS 37 and some annual
improvements on IFRS 1, IFRS 9, IAS 41
and IFRS 16.
Annual periods beginning
on or after January 1, 2022.
IAS 1 Presentationofnancialstatementson
classicationofliabilities.
Annual periods beginning
on or after January 1, 2023.
IAS 12 Amendment to deferred tax related to
assets and liabilities arising from a single
transaction.
Annual periods beginning
on or after January 1, 2023.
IFRS 17 Insurance contracts. Annual periods beginning
on or after January 1, 2023.
USE OF ESTIMATES
ThepreparationofthenancialstatementsincompliancewithIFRSrequiresmanagement
tomakejudgments,estimatesandassumptionsthataectamountsreportedinthenancial
statements. The estimates and assumptions are based on experience and various other
factors that are believed to be reasonable under the circumstances and are used to judge
the carrying values of assets and liabilities that are not readily apparent from other sources.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions of
estimates are included in the period in which they are revised. The most important estimates
are stated under the relevant policies and relate to impairment analysis of Property, Plant
and Equipment, the valuation of Inventories and the incremental borrowing rate and/or
the renewal options of the Lease Liabilities.
CONSOLIDATION
TheconsolidatednancialstatementsincludetheaccountsofHollandColoursNVandits
subsidiaries. Subsidiaries are companies over which Holland Colours NV has control
because it is exposed to, or has rights to, variable returns from its involvement with the
subsidiaryandhastheabilitytoaectreturnsthroughitspoweroverthesubsidiary.
Non-controlling interests in equity and in results are presented separately.
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
88
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
Theconsolidatednancialstatementsincludethenancial
data of the following companies:
Legal structure including capital interest
and division structure
Division Subsidiaries Interest
Consolidated
EMEIA Holland Colours Europe BV,
the Netherlands, Apeldoorn
100% 100%
EMEIA Holland Colours UK Ltd,
United Kingdom,
Gillingham
100% 100%
EMEIA Holland Colours Hungária
Kft, Hungary, Szolnok
100% 100%
Americas Holland Colours Canada
Inc., Canada, Toronto
100% 100%
Americas Holland Colours Americas
Inc., United States,
Richmond Indiana
100% 100%
Americas Holland Colours Mexicana
SA de CV, Mexico, Tultitlán
100% 100%
Asia PT Holland Colours Asia,
Indonesia, Surabaya*
99% 100%
Asia PT Holco Indo Jaya,
Indonesia, Surabaya**
88% 100%
*
Holland Pigments BV holds 1% of the legal ownership of PT Holland Colours
Asia, in Indonesia. Economic ownership resides with Holland Colours NV.
**
PT Holland Colours Asia holds 36% of the legal and economic ownership of
PT Holco Indo Jaya, in Indonesia, and Holland Colours NV holds 52% of
the legal and economic ownership.
There were no changes to the consolidated Group
comparedwiththe2021/2022nancialyear.
Holland Colours NV and PT Holland Colours Asia jointly
own 88% of the shares in PT Holco Indo Jaya, and
the Italy-based Gaypa Srl holds the remaining 12%
(12% in 2020/2021). The results of PT Holco Indo Jaya
areconsolidatedonanintegralbasisintheguresfor
the Group. The non-controlling interest is recognized
separately in the results and equity of the Group.
Intheconsolidatednancialstatements,allintercompany
receivables, payables and deliveries are fully eliminated,
as are the related and not yet realized results. Unrealized
losses are eliminated in the same way as unrealized
protsunlessthereisanindicationofimpairment.
FOREIGN CURRENCY
Transactionsincludedinthenancialstatementsofeach
of the Group's subsidiaries are measured using the
currency of the primary economic environment in which
the subsidiary operates. Transactions in foreign currency
are translated to the functional currency using the foreign
exchange rate at the transaction date. Monetary assets
and liabilities denominated in foreign currencies are
translated into the functional currency using the exchange
rate at the balance sheet date. Foreign exchange
dierencesresultingfromtranslationintothefunctional
currency are recognized in the Income Statement.
Assets and liabilities of Group companies with a functional
currency other than the euro are translated using the
foreign exchange rate at the balance sheet date.
The Income Statement for these Group companies is
translated at the average exchange rate during the
nancialyear.Foreignexchangeratedierencesare
recognized in unrealized results and the foreign currency
translation reserve. On sale or termination of an operation
outside the Eurozone, the amount concerned is transferred
from Equity to the Income Statement as part of the gain or
loss on sale or termination.
The principal exchange rates against the euro used in
preparing the balance sheet and the statement of income
are:
Exchange Rates Used
in EUR Balance Sheet
Income
Statement
March 31,
2022
March 31,
2021
2021/
2022
2020/
2021
US dollar 1.11 1.17 1.16 1.17
British pound 0.85 0.85 0.85 0.89
Canadian dollar 1.39 1.48 1.46 1.54
Mexican peso 22.09 24.11 23.61 25.25
REVENUE RECOGNITION
Revenues from contracts with customers are recognized
by identifying the contract and its performance obligations
as well as determination and allocation of the transaction
price to these performance obligations. Revenues are
recognized for each performance obligation when the
control of goods or service have been transferred from
Holland Colours to the customer at a point in time based
on the contract. This is normally when the goods have
arrived at the customer. The revenue is measured at
the fair value of the transaction price received. This means
the revenue is recognized net of rebates, discounts and
similar allowances and net of sales tax.
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
89
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
Grants
Government grants related to costs (which include grants
related to COVID-19) are deducted from the relevant costs
to be compensated in the same period. Government
grants to compensate for the cost of an asset are
deducted from the cost of the related asset.
Finance Income and Expense
Finance Income and Expense include the income and
expenses on lent and borrowed funds and interest
charges on lease payments. Finance Income and
Expense is recognized in the Income Statement under
Finance Income and Expense if no hedge accounting is
applied.
Income Tax
Income Tax Expenses compromises both current and
deferredtax,includingtheeectsofchangesintaxrates.
The tax amount is calculated on the basis of the tax rates
and tax legislation as applicable on the reporting date in
the countries in which the Group operates and generates
income subject to taxation. Current income tax relating to
items recognized directly in Equity is recognized in Equity
and not in the Income Statement. Uncertain tax positions
mayexistduetointerpretationdierencesofapplicable
tax regulations.
Current tax receivables and liabilities for the current
period are measured at the amount expected to be
reclaimed from or paid to the tax authorities.
Earnings per Share
Earnings per ordinary share are calculated as the Net
Result attributable to holders of ordinary shares, divided
by the weighted average number of outstanding shares in
the period concerned.
PRINCIPLES FOR THE VALUATION OF ASSETS
AND LIABILITIES
General
The valuation principles are primarily based on valuation
of the assets and liabilities at historical cost.
Osetting Financial Instruments
FinancialAssetsandLiabilitiesareosetinthe
consolidated balance sheet only in situations of an actual
legallyenforceablerighttoosettheamountsrecognized,
and only if it is the intention to settle these amounts on
a net basis or simultaneously.
Intangible Assets
Costs of Development Activities are capitalized if
the product or process is technically and commercially
feasible,theGrouphassucientresourcestocomplete
its development, and it is expected that the product
or process will generate future gains. The capitalized
expenses comprise direct labor cost and a surcharge for
overhead costs, to the extent that these are attributable
to the project. All other research and development costs
are stated as an expense in the Income Statement at
the time they are incurred.
Capitalized Development Costs are valued at cost, less
accumulated amortization and impairments, if applicable.
Amortization costs are charged to the Income Statement
overtheirestimatedusefullife,whichistypicallyveyears.
Intangible Assets are assessed for impairment if there are
events or indications that an intangible asset might be
subject to a loss in value. The amortization period and
method for an intangible asset with a measurable useful
life are assessed, at the very least, at the end of each
nancialyear.Changesintheexpectedusefullifeofan
asset or in its expected pattern of future economic
benetsareaccountedforbychangingtheamortization
period or method and are treated as changes in
accounting estimates.
Other Intangible Assets
The Other Intangible Assets consist of the costs of
computer software and licenses, plus the external costs
related to their implementation and commissioning. Other
Intangible Assets are measured at historical cost; that is,
the acquisition price or production cost less cumulative
amortization and any applicable impairments.
Amortization
Amortization of Intangible Assets is charged to the Income
Statement according to the straight-line method. The basis
applied is the estimated useful life of each component
within an item that falls into the Development Costs and
Other Intangible Assets category.
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
90
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
The estimated useful life is as follows:
Development Costs 5 years
Other 3-5 years
Property, Plant and Equipment
Property, Plant and Equipment are stated at cost less
accumulated depreciation, based on the estimated useful
life of the assets concerned and impairment losses.
The costs of assets produced in-house comprise material
costs, direct labor cost and an appropriate portion of
the directly attributable overhead costs. Finance costs
are added to the costs of Property, Plant and Equipment
if these meet the conditions for recognition in the balance
sheet.IfsignicantpartsofProperty,PlantandEquipment
must be replaced at regular intervals, the Group
recognizes these as separate assets with their own useful
life and depreciation method. All other repair and
maintenance costs are recognized in the Income
Statement at the time they occur.
Property, Plant and Equipment are assessed for
impairment if there are events or indications that an item
may have lost value. The depreciation period and method
for Property, Plant and Equipment with a measurable
useful life is assessed, at the very least, at the end of each
nancialyear.Changesintheexpectedusefullifeof
an asset, or in its expected pattern of future economic
benets,areaccountedforbyadjustingeither
the depreciation period or method. These are treated
as changes in accounting estimate.
Financial Non-Current Assets
Loans and receivables for which the maturity date is more
than 12 months after the balance sheet date are
presented as Financial Non-Current Assets. On initial
recognition, these are measured at fair value less directly
attributable transaction costs. After initial recognition,
interest-bearing loans are valued at amortized cost using
theeectiveinterestratemethod,lessanyimpairment.
Gains or losses arising from changes in the amortized cost
are accounted for in the Income Statement under Finance
Expense.
Right-of-Use Assets
We assess at inception whether a contract is, or contains,
a lease. A contract is or contains a lease if the contract
conveystherighttocontroltheuseofanidentiedasset
for a period of time in exchange for a consideration.
Leases are recognized as Right-of-Use Assets on the
balance sheet under Non-Current Assets. The related
lease liability is recognized as an obligation on the balance
sheet under Non-Current Liabilities and Current Liabilities.
The Group applies judgement in evaluating the term of
lifetime of a lease. A judgement has to be made whether
it is reasonably certain to exercise an option to renew or
terminate a lease. The non-cancelable term of the lease is
then determined based on these judgements. If the Group
expects that the expiry date of the current contract will
not in fact be the actual end date, the lease obligation is
determined to include extension periods.
The Group uses the practical expedients to apply a single
incremental borrowing rate per portfolio of leases. Leases
of low-value objects and non-lease components are
excluded for buildings. Non-lease components do not
apply to vehicle fuel costs, because fuel costs do not form
part of the lease term. The Group uses the implicit interest
rate when available. If not, the Group uses an Incremental
Borrowing Rate (IBR) to measure the lease liabilities.
The IBR is the rate of interest that the Group would have
to pay to borrow the necessary funds, over a similar term
and with a similar security, to obtain an asset of similar
value to the Right-of-Use Asset in a similar economic
environment.TheIBRthereforereectswhattheGroup
‘would have to pay.‘ This necessitates estimating when no
observable rates are available or when rates need to be
adjustedtoreectthetermsandconditionsofthelease.
The Group estimates the IBR based on observable inputs
(such as market interest rates) and is required to make
certainentityspecicestimates.Forthisnancialyearthe
weighted average IBR is 4.1%.
Right-of-Use Assets are depreciated using the straight-line
method over the lifetime of the object, in line with the
duration of the contract. The net present value of the
obligation is calculated using the applicable discount rate
for object and country. The periodical payments to the
lessor, based on the lease contract, can be considered as
repayments of the obligation. The depreciations costs are
charged as Depreciation and Amortization, the service
costs as Other Operating Expenses and the interest
expenses as Finance Expense to the Income Statement.
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
91
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
lease and rental agreements included in the standard for
LeaseandRentalObligationsareclassiedas
Right-of-Use Assets. Property, Plant and Equipment
acquired by means of leases or rentals are, at the moment
of capitalization, measured using the then net present
value of the lease payments. The depreciation period for
Right-of-UseAssetsreectsthedurationoftheunderlying
lease or rental contract. The depreciation method is
straight-line.
The depreciation period and method for Right-of-Use
Assets is assessed, at the very least, at the end of each
nancialyear.Changesintheexpectedusefullifeof
an asset or in its expected pattern of future economic
benetsareaccountedforbyadjustingeitherthe
depreciation period or method. These are treated as
changes in accounting estimate.
Low-value leases, below € 5,000 per underlying asset,
are not recognized in the Right-of-Use Assets and Lease
Liabilities. Lease payments on the lease of low-value
assets are recognized as expensed on a straight-line basis
over the lease term and recognized as general and
administrativeexpensesinthestatementofprotorloss.
Low-value leases are not recognized in the balance sheet.
Depreciation
Depreciation is charged to the Income Statement
according to the straight-line method on the basis of
the estimated useful life of each component of items
of Property, Plant and Equipment. Depreciation is not
applied to land.
The estimated useful life is as follows:
Buildings 25-40 years
Machinery and Equipment 10 years
Other Non-Current Assets 3-5 years
Right-of-Use Assets 1-10 years
The remaining useful life, residual value and depreciation
method are assessed on an annual basis.
Impairment of Non-Current Assets
An asset is impaired if its realizable value is less than its
carrying amount. Non-current assets are assessed on an
annual basis for indications of impairment per location.
If there are such indications, or events, the realizable
value of the asset concerned is estimated based on
either its directly realizable value or its value in use to
the company. The impairment test is primarily based
oncashowforecastsofveyears.Elementsconsidered
todetermineifadierentapproachwouldbemore
appropriate are, among others, high growth/emerging
economies, geographical expansion opportunities and
theintroductionofnewproductlines.Thecashow
forecastiscalculatedwiththeexpectedfreecashow
and discounted to the present value using a weighted
average cost of capital of 8% for the Group. Sensitivity
tests are performed for growth assumptions, scenario-
basedadjustmentstothefreecashowforecastandfor
the weighted average cost of capital.
An impairment loss is reversed if there is a change to
the estimates used. The reversal is done to the extent
that the carrying amount of the asset does not exceed
the carrying amount that would have been the case if no
impairment had been recognized – so after deduction of
the then applicable depreciation.
Deferred Income Tax
A receivable is recognized for deferred tax positions, or
a provision is formed for this, using the balance sheet
methodfortemporarydierencesbetweenthecarrying
amountofassetsandliabilitiesfornancialreporting
purposes and the carrying amount of these items for tax
purposes.
The carrying amount of Deferred Tax Assets is assessed
at reporting date and reduced if and when it is unlikely
thatsucienttaxableprotwillbeavailabletoabsorb
thesetemporarydierencesand/orchangesincurredto
the assessment base (such as a change in the corporate
tax rate). Deferred Tax Assets not recorded are
reassessed at reporting date and recorded when deemed
realizablebasedonexpectedfuturetaxableprots.
Deferred Tax Assets and Liabilities are valued at the tax
rates and under the tax law that has been substantially
enacted at the balance sheet date and which are expected
to apply in the period in which the asset is realized or
the liability is settled.
Under certain circumstances, current and deferred tax
isrecognizedoutsideprotorlosseitherinOther
Comprehensive Income or directly, in Equity, depending
on the item the tax relates to.
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
92
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
The estimated selling price is based on actual selling
prices and the recent sales history information per
product. Aging of products is tracked and based on and in
line with the aging management estimates of the risk of
obsolescence and this is used to adjust the valuation of
the inventory accordingly.
Trade and Other Receivables
Trade and Other Receivables are recognized initially at fair
value and subsequently at amortized cost. A provision for
non-collectability is established based on expected credit
loss.
The Group measures the expected credit losses allowance
for its trade receivables for the whole lifetime of the
receivables(simpliedapproach).Tomeasurethe
expected credit losses, trade receivables have been
grouped based on shared credit risk characteristics.
Ifthesedierencesaresubstantial,theyaregrouped
based on days past due and security, when applicable.
The expected loss rates are based on the historical
paymentprolesofsalesofthelastveyearsandthe
corresponding historical credit losses experienced within
thisperiod.Thehistoricallossratesareadjustedtoreect
current and forward-looking information when these
wouldaecttheabilityofcustomerstosettlethe
receivables. Management assesses forward looking
informationinrelationtothespecicmarketinwhich
itoperates.Baddebtsarewrittenoentirelyonce
the inability to collect has been established with certainty.
Indicators that there is no reasonable expectation of
recovery include, amongst others, the failure to make
the contractual payments for a period longer than the
local applicable payment term, or a trade debtor has
nancialdiculties,oratradedebtorisunabletoengage
in a repayment plan with the Group.
Cash and Cash Equivalents
Cash and Cash Equivalents comprises cash balances
and short-term deposits that are available on call. Cash
andCashEquivalentsarenancialinstrumentsthatare
classiedasmeasuredatamortizedcost.
Dividends
Dividends payable to shareholders are recognized as
aliabilitytoshareholdersoncetheproposedprot
appropriation has been approved by the Annual General
Meeting of Shareholders.
Employee Benet Obligations
Holland Colours Group has a number of pension plans in
accordance with local conditions and practices. The
voluntarily pension plans of the subsidiaries are in line
with local legislation and regulation and are included in
thenancialstatementsasdenedcontributionplans.
These involve the payment of predetermined premiums to
an insurance company. The terms of these pension plans
mean that Holland Colours Group has no legal or factual
obligation to pay additional premiums if the insurance
companyhasinsucientmeanstofundcurrentorfuture
pensions.
DeferredTaxAssetsandLiabilitiesareosetif,andonlyif,
thereisalegallyrecognizedrighttosetocurrenttax
assets and liabilities, and the Deferred Tax Assets and
Liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity, or
dierenttaxableentitieswhichintendtosettlecurrenttax
liabilities and assets on a net basis, or to realize the assets
and settle the liabilities simultaneously, in each future
periodinwhichsignicantamountsofdeferredtax
liabilities or assets are expected to be settled or
recovered.
There is a degree of uncertainty around the correct
interpretation of complex tax regulations and the amount
andtimingoffuturetaxableprots.
Given the huge diversity of international business
relations, discrepancies between the assumptions made
and the actual outcomes, or future changes in such
assumptions, this could lead to future changes in the tax
payments and returns already recognized.
Inventories
Inventories are measured at the lower of cost and net
realizable value. The cost price for inventories is based on
theFIFOprinciple(rstin,rstout).FinishedGoodsis
valued at production cost including costs of raw materials
and a surcharge to direct and indirect production costs.
This valuation is based on normal capacity, or at realizable
value if lower. The net realizable value compromises the
estimated selling price in the normal course of the
business, less the estimated cost for completion and
estimated costs necessary to make the sale.
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
93
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
Other Employee Benets
The termination of the pre-pension plan (including the
transitional arrangement) for employees in the Netherlands
hasledtotheoriginallyagreedconditionalnancingofpast
service years being converted into an annual payment of
the same amount. This is also conditional. The most
important conditions for this payment are that an employee
must still be in the company’s service at the time of the
annualpaymentandthattheGroup’snancialresultsare
assessedbytheBoardofManagementasbeingsucient
to cover this payment. The Group has included a provision
for this future liability, which will end in September 2037.
Any revaluation of this future liability is recognized in the
protandlossaccount.
The Group has also included a provision for other long-
termobligationsregardingEmployeeBenets.These
include jubilee payments, which are earned by employees
for their service in the current and previous reporting
periods.
The obligations are calculated partly on the basis of
actuarial principles and based on a discount rate of (0.6%)
(2020/2021 (0.6%)) in accordance with the IBoxx Index
Government bonds. They are recognized under Non-
Current Liabilities. The expenses are reported in the
Income Statement under Personnel Expenses. All
assumptions are reassessed at balance sheet date.
Provisions
A provision is recognized in the balance sheet when there
is a present obligation (legal or constructive) for the Group
as a result of a past event and it is probable that an
outowofeconomicbenetswillberequiredtosettlethis
obligation and a reliable estimate can be made of the
amount of the obligation.
Provisions for restructuring of activities are recognized
when a detailed and formal restructuring plan has been
approved, and the restructuring has either commenced or
has been announced publicly. We do not provide for
future operating costs.
Lease Liabilities
The obligation arising from lease and rental agreements is
classiedasLeaseLiabilitiesonthebalancesheet.Lease
Liabilities that run longer than 12 months are recognized
under Non-Current Liabilities. Lease Liabilities shorter
than 12 months are recognized under Current Liabilities.
The estimated value of the liability is the calculated net
present value of the remaining periodical payments as
included in the contract. Applicable discount rates have
been determined for each object and country of the lease
portfolio for the calculation of the net present value.
Trade and Other Payables
Trade and Other Payables are recognized initially at fair
value and subsequently measured at amortized cost.
Determination of Fair Value
Certain accounting policies as well as disclosures by the
Grouprequirefairvalueassessmentsofnancialand
non-nancialassetsandliabilities.Furtherinformationon
the principles used in these assessments is provided in
thenotesrelatingtothespecicassetorliability.
Long-Term Receivables
Long-termReceivablesatxedandvariableinterestrates
are assessed by the Group on the basis of factors such as
the applicable interest rate and the borrower’s individual
creditworthiness. When necessary, a provision is formed
for losses expected on these receivables on the basis of
this assessment. As at March 31, 2022, the carrying
amount of these receivables did not vary materially from
their fair value.
Trade and Other Receivables
The fair value of Trade Debtors and Other Receivables is
estimatedasthenetpresentvalueoffuturecashows,
based on market interest rates as at the reporting date.
This fair value is determined for informative purposes.
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
94
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
4. FinancialRiskManagement
As part of the normal conduct of its business, the Group is
exposedtoavarietyofnancialriskssuchascurrencyrisk,
credit risk, liquidity risk, interest risk and capital risk.
In terms of risk management policy, it is recognized that
thenancialmarketsarevolatileandthattheaimshould
betolimitthepotentialnegativeeectsofthisonthe
Group’snancialresultsasmuchaspossible.TheBoard
of Management is responsible for managing the risks
associated with our activities and the establishment and
adequate functioning of appropriate risk management
and control systems.
CURRENCY RISK
The reporting currency of the Group is the euro. Being a
global operation, the Group is exposed to a variety of
foreign currencies. Currency risk arises from engaging in
commercial transactions in non-functional currencies
(mainlyUSD).HollandColoursaimstolimittheeectof
transaction-related exchange-rate exposure on the Group
by preferring to invoice in the functional currency of the
supplying entity, which in most cases is regional. Currency
hedging on outstanding AR or projected sales is not in
place. The Group participates in several foreign
subsidiaries of which the net equity is mainly USD
nominated. This is subject to currency translation risk in
the consolidation process. The impact varies over the
years and is complicated to mitigate due to the long-term
uctuationsintheEUR-USDrate.Thisriskismonitored
but not hedged.
Thetablebelowshowsthesensitivityofthenetresultaftertaxandtheequity(includingtranslationeects)
to the US dollar with all other variables kept constant:
2021/2022 2020/2021
Increase EUR-USD 10% Decrease EUR-USD 10% Increase EUR-USD 10% Decrease EUR-USD 10%
Net Result (544) 634 (813) 674
Equity (2,847) 3,627 (2,479) 3,052
Inrelativeterms,thevariouscurrenciesaectedtheGroup’snetsalesandexpensesasfollows:
Revenue
Expenses
2021/2022 2020/2021 2021/2022 2020/2021
Euro 47% 46% 41% 43%
USdollar 37% 39% 32% 43%
Other 16% 15% 27% 14%
Total 100% 100% 100% 100%
There is no insurance for credit risk in place. The cash
transactionsareexecutedwithcreditworthynancial
institutions.
LIQUIDITY RISK
Liquidity risk is the risk that Holland Colours is unable to
meet its obligations when they are due. Holland Colours’
policy with regard to liquidity risk is to ensure to the best
ofitsabilitythatsucientcommittedcreditfacilitiesare
available to meet its payment obligations in time, in both
normal and exceptional situations. The Trade and Other
liabilities all fall due within one year.
CREDIT RISK
CreditriskistheriskofnanciallossbytheGroupinthe
event a customer fails to meet their contractual obligations.
Credit risk mainly arises from receivables from customers.
Holland Colours follows an active policy to minimize credit
risk. This policy includes strict internal guidelines regarding
overdue payments, the use of sales information systems,
the consultation of external sources and, where necessary,
requesting security for payment. Due to its distribution over
a large number of customers and geographical areas, there
isnosignicantconcentrationofcreditrisk.
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95
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
TheGroupaimstomaintainexibilityinfundingby
keeping credit lines available at a number of well-known
nancialinstitutions.Onthebasisofcashowforecasting
models, the Group tests whether the available credit
facilities will cover the expected credit need. Based on the
analysis, the Group believes that the current expected
creditneediscoveredsuciently.
INTEREST RATE RISK
Attheendofthescalyear,therewerenocurrentor
non-currentborrowings.AstheGrouphasnosignicant
interest-bearing assets and liabilities, the direct impact of
changes in the market rates to the Group’s income and
operatingcashowislimited.
CAPITAL RISK
The policy of the Group regarding the capital structure of the
company is based on the solvency ratio. The solvency ratio
remains above 60% and is calculated by equity/total assets.
Inaddition,theGroupaimstonanceitsactivitieswith
equity.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Group applies the following hierarchy for determining
anddisclosingthefairvalueofnancialinstrumentsby
valuation technique:
•
Level 1: Quoted (unadjusted) prices in active markets
for identical assets or liabilities;
•
Level 2: Valuation techniques whereby the lowest-level
input as significant for valuation at fair value is directly
or indirectly observable;
•
Level 3: Valuation techniques whereby the lowest level
input as significant for valuation at fair value is not
observable.
Changes in the fair value of the above-mentioned Financial
Instruments, if accounted for at fair value, are recognized
in the Income Statement unless hedge accounting is
applied.
The fair value of Financial Instruments is calculated on the
basis of the net present value of the expected future cash
owsbyvirtueofrepaymentandinterestpayments.The
calculation is not based on observable market data.
Trade and Other Receivables, Payables to Suppliers, Credit
Institutions and Other Debt due to expire within one year
areincludedinthenancialstatementsatamortizedcost.
Theamortizedcostisconsideredtobeareectionoffair
value due to the short duration.
5. CashFlowStatement
Thecashowstatementispreparedusingtheindirect
method.Cashowsinforeigncurrenciesaretranslated
at transaction date.
6. SegmentInformation
The Group is divided into geographical segments for
management as well as business purposes. The segment
informationcontainedinthenancialstatementsis
therefore presented based on the organizational structure
of the Group. In this, the three operating units each
represent a region and the holding, under ‘Other‘
represents General Management, Innovation and
Technology and other central functions.
The Board of Management monitors the operating result
of the geographic segments to facilitate the decision-
making process in relation to the allocation of resources
and the performance evaluation. The operating result
of the segments is determined and based on the same
accounting principles as the operating result shown in
theconsolidatednancialstatements.
The funding of the Group, including loan structure and
dividend policy as well as the current income tax, deferred
incometaxandcertainnancialassetsandliabilitiesare
also not allocated to the segments since these items are
supervised at Group level.
Transfer prices for transactions and services between
the operating segments are set on an arm’s-length basis.
Revenue in the Netherlands accounted for 53%
(2020/2021: 52%) and the USA accounted for 24%
(2020/2021: 24%) of total revenue. There are no other
signicantrevenueconcentrationsinspeciccountries.
TheGroupcompaniesintheidentiedsegmentsareto
some extent dependent on certain large customers.
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
96
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
Segments 2021/2022 EMEIA Americas Asia Other
Adjustments/
Elimi nations
Total
Revenue 58,489 37,622 14,354 – – 110,465
Intersegmental Transactions 1,195 38 – – (1,233) –
Revenue including Intersegmental Transactions 59,684 37,660 14,354 – (1,233) 110,465
Depreciation, Amortization and Impairments (1,256) (722) (382) (254) (798) (3,412)
Operating Result from Continued Operations 5,813 3,901 1,923 1,992 – 13,629
Financial Income – – – – 94 94
Financial Expense – – – – (86) (86)
Tax – – – – (3,301) (3,301)
Net Result – – – – 10,243 10,243
Non-Current Assets 10,853 6,318 4,251 59,572 57,447 23,547
Current Assets 26,543 18,461 10,032 2,178 (1,145) 56,069
Liabilities 17,005 3,996 3,087 4,016 (6,239) 21,866
Total Investments 2,141 809 324 74 (3) 3,345
Average Number of Employees (in FTE) 205 95 129 19 – 448
Segments 2020/2021 EMEIA Americas Asia Other
Adjustments/
Elimi nations
Total
Revenue 48,929 32,236 14,864 – – 96,029
Intersegmental Transactions 902 29 – – (931) –
Revenue including Intersegmental Transactions 49,831 32,265 14,864 – (931) 96,029
Depreciation, Amortization and Impairments (1,242) (707) (349) (313) (448) (3,059)
Operating Result from Continued Operations 3,676 3,745 3,805 1,190 – 12,416
Financial Income – – – – 22 22
Financial Expense – – – – (97) (97)
Tax – – – – (2,762) (2,762)
Net Result – – – – 9,579 9,579
Non-Current Assets 10,024 5,940 3,822 52,093 (49,375) 22,505
Current Assets 20,230 16,264 7,516 2,134 76 46,220
Liabilities 14,182 3,781 2,291 3,297 (5,425) 18,126
Total Investments 1,388 406 159 1 – 1,954
Average Number of Employees (in FTE) 208 101 112 15 – 436
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
97
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
7. Revenue
The table below shows the breakdown of Revenue per market segment.
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Building & Construction 52,310 42,632
Packaging 32,930 31,663
Coatings, Sealants & Adhesives 15,021 12,593
Other 10,204 9,141
Total Revenue 110,465 96,029
8. PersonnelExpenses
The table below shows the breakdown for Personnel Expenses.
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Wages and Salaries (19,157) (16,987)
Social Security (1,949) (1,943)
Pension Costs (1,264) (1,009)
Personnel Expenses (22,370) (19,939)
Forthisnancialyear,anaccrualforprotsharingof€2,255isincluded(2020/2021:
€ 1,708). This is included under Wages and Salaries. All employees in the Group are eligible
fortheprot-sharingplan.PaymentsdependontheGroup’sROIandtheoperatingresult
of the division in which the individual employee works.
The remuneration of the Board of Management and the Supervisory Board is shown
inNote28:RelatedParties.Thepensioncostsrelatetodenedcontributionplans.
Wagesandsalariesinthisnancialyearinclude€90ofgovernmentgrants
(2020/2021: € 1,083, including € 1million COVID-19 assistance in the USA).
Inthisnancialyear,theaveragenumberofemployeeswas448FTEs
(2020/2021: 436 FTEs).
9. OtherOperatingExpenses
The table below shows the main components of the Other Operating Expenses.
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Other Personnel (2,496) (2,610)
Travel and Accommodation (939) (639)
Maintenance (1,471) (1,288)
Energy (1,446) (1,089)
Consulting (2,414) (1,971)
Materials (1,488) (1,154)
Insurance (616) (560)
Other Costs (1,356) (1,523)
Other Operating Expenses (12,226) (10,834)
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
98
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
10. FinanceIncomeandExpense
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Finance Income 94 22
Finance Expense (180) (97)
Finance Income and Expense (86) (75)
11. IncomeTax
ThemaincomponentsoftheTaxchargeinthisnancialyearareshowninthetablebelow.
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Consolidated Income Statement
Corporate Income Tax due this year:
•
Current Income Tax (3,329) (2,855)
•
Tax Incentive Programs, including Innovation Box 140 117
•
Other Taxes, including Applied Withholding Tax (124) (107)
Deferred Tax:
•
In relation to the existence and reversal of
temporary differences 12 83
Income Tax recognized in the Consolidated
Income Statement (3,301) (2,762)
The Corporate Income Tax as recognized in the consolidated income statement amounted
to € 3,301 versus € 2,762 the previous year. The deferred tax asset position increased by
€ 12 (this increased the previous year by € 83). The increase mainly related to the change
intarisintheNetherlands.Pleasealsorefertonote15.
The Other Taxes mainly relates to local applied Withholding Taxes on dividends and
royalties paid to the company by the operating entities in Indonesia, Canada and Mexico.
These accumulated charges are gradually applied against the Dutch corporate income tax.
CalculationofeectivetaxratestartingatstatutorytaxrateintheNetherlands:
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Result before Income Tax 13,732 12,341
At the 25% rate applicable in
the Netherlands (25.0%) (3,433) (25.0%) (3,085)
Eectofdierenttaxratesincountries
in which the Group operates 0.0% – 0.0% –
Tax exempt income COVID-19 assistance 0.8% 104 2.0% 252
Adjustments of Tax recorded in previous
years (0.4%) (51) 0.3% 32
Expenses not tax-deductible (0.4%) (61) (0.7%) (84)
Tax incentive programs 1.0% 140 0.9% 117
Otherdierences 0.0% – 0.0% 6
(24.0%) 3,301 (22.5%) (2,762)
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
99
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
12. IntangibleAssets
Development
Costs Other
Assets under
Construction Total
As at March 31, 2020
Cost 1,922 504 28 2,454
Accumulated Amortization (1,696) (478) – (2,174)
Carrying Amount 226 26 28 280
Change in Asset Value
Capital Expenditures
– – – –
Carrying Amount of Disposals
Transfer
– 28 (28) –
Impairments
Amortization
(107) (17) – (124)
ExchangeRateDierences
– – – –
Balance
(107) 11 (28) (124)
As at March 31, 2021
Cost 1,922 532 – 2,454
Accumulated Amortization (1,803) (495) – (2,298)
Carrying Amount 119 37 – 156
Change in Asset Value
Capital Expenditures – – – –
Transfer – – – –
Amortization (71) (16) – (87)
ExchangeRateDierences – – – –
Balance (71) (16) – (87)
As at March 31, 2022
Cost 1,922 532 – 2,454
Accumulated Amortization (1,874) (511) – (2,385)
Carrying Amount 48 21 – 69
The company’s total expenses for research and
developmentwere€2,007inthenancialyear
(2020/2021: € 2,390). The expenses are included under
Personnel Expenses, Depreciation, Amortization and
Other Operating Expenses. Due to the development
structure of the research and technology department,
the Group does not comply with all the criteria for
capitalizing development costs in line with IAS 38,57.
The amortization amounting to € 87 (2020/2021: € 124)
is recognized under Amortization and Impairments in
the consolidated Income Statement.
Therewerenoimpairmentsinthisnancialyearinrelation
to the capitalized development costs (2020/2021: nil).
The Other Intangible Assets consist of the purchase price
of computer software and licenses, as well as the external
costs related to their implementation and commissioning.
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
100
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
13.
Property, Plant and Equipment
Land and
Buildings
Machinery and
Equipment Other
Assets under
Construction Total
As at March 31, 2020
Cost
24,736 30,248 4,972 680 60,636
Accumulated Depreciation
(14,795) (21,178) (4,265) – (40,238)
Carrying Amount
9,941 9,070 707 680 20,398
Change in Asset Value
Capital Expenditures
1,334 443 115 61 1,953
Transfer Assets under Construction
44 186 123 (353) –
Transfer Cost between Categories
206 (206) – – –
Transfer Cccumulated Depreciation
between Categories
(130) 130 – – –
Disposal Cost Price
(164) (883) (304) – (1,351)
Disposal Accumulated Depreciation
128 779 303 – 1,210
Depreciation
(682) (1,371) (257) – (2,310)
ExchangeRateDierences
(384) (144) (19) 1 (546
Balance
352 (1,066) (39) (291) (1,044)
As at March 31, 2021
Cost
25,353 29,116 4,701 389 59,559
Accumulated Depreciation
(15,060) (21,112) (4,033) – (40,205)
Carrying Amount
10,293 8,004 668 389 19,354
Change in Asset Value
Capital Expenditures
303 1,326 154 1,563 3,346
Transfer Assets under Construction
138 1,109 74 (1,321) –
Disposal Accumulated Depreciation
– (8) (19) – (26)
Depreciation
(676) (1,410) (228) – (2,314)
ExchangeRateDierences
222 177 19 39 456
Balance
(13) 1,194 0 281 1,463
As at March 31, 2022
Cost
26,016 31,720 4,930 670 63,335
Accumulated Depreciation
(15,736) (22,522) (4,261) – (42,519)
Carrying Amount
10,280 9,198 668 670 20,817
The capital expenditures include nil
(2020/2021: nil) of capitalized Personnel
Expenses. No impairments were occurred in
thisnancialyear(2020/2021:nil),whilethe
asset count led to Disposals. The Group has
provided collateral to a maximum of
€ 789 (2020/2021: € 724) in the form of
mortgage rights on buildings in Indonesia.
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
101
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
14. Right-of-UseAssets
The table below shows the movement of Right-of-Use Assets. These Assets consist of
capitalized lease and rental contracts.
Land and
Buildings
Machinery
and
Equipment Vehicles Other Total
As at April 1, 2020 584 158 683 – 1,425
Change in Asset Value
New Contracts 128 76 612 – 816
Depreciation (152) (62) (411) – (625)
Other Adjustments – (63) 63 – –
Balance (24) (49) 264 – 191
As at March 31, 2021
Carrying Amount 560 109 947 – 1,616
Change in Asset Value
New Contracts 150 48 441 – 639
Depreciation (336) (59) (405) – (800)
Other adjustments – – (208) – (208)
Transfer – – – – –
Balance (186) (11) (172) – (396)
As at March 31, 2022
Carrying Amount 374 98 775 – 1,247
15. DeferredIncomeTaxAssetsandLiabilities
DeferredIncomeTaxresultingfromtemporarydierencesbetweenthescaland
commercial value of assets and liabilities is accounted for in the nominal tax rate applicable
inthecountryconcerned,butonlyifitislikelytoberealizedfromfuturetaxableprots.
This likelihood assessment is based on projections of the future taxable results of the
relevant entities in the Group. These projections are partly based on approved budgets.
The Deferred Tax Assets and Liabilities stated in the balance sheet can be attributed to
the following items:
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Assets Liabilities Assets Liabilities
Property, Plant and Equipment 301 250 297 189
Financial Non-Current Assets 203 – 219 –
Inventories 173 – 151 –
Other Receivables 238 – 245 –
EmployeeBenets 351 – 342 –
Other Assets/Liabilities 149 23 65 –
Tax Loss Carry-Forward – – – –
Balance of Assets and
Liabilities 1,415 273 1,319 189
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
102
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Current 30 14
Non-Current 1,112 1,116
Deferred Tax Assets and Liabilities 1,142 1,130
Change in Net Deferred Tax
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Opening Balance 1,130 1,047
Recognized in Income Statement 12 83
Deferred Tax Assets and Liabilities 1,142 1,130
The deferred tax asset position increased by € 12 (2020/2021: € 83) due to changes in
taris.
16. Inventory
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Raw Materials 13,639 7,173
Finished Goods 6,959 5,431
Inventory 20,598 12,604
The Income Statement includes an amount of € 54,594 (2020/2021: € 46,429) under
the direct selling cost and raw materials for usage of inventory goods.
At March 31, 2022, the provision for obsolete inventory amounted to € 1,016
(March 31, 2021: € 1,010). Movements in the provision for obsolete inventory are shown
below.
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Opening Balance (1,010) (1,013)
Additions to the Provision (89) (319)
Withdrawals/Releases 114 299
ExchangeRateDierences (31) 23
Closing Balance (1,016) (1,010)
Impairments charged to the provision relates to sales from inventory where provided for,
or to disposal of obsolete inventory.
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
103
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
17. TradeandOtherReceivables
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Trade Debtors 15,934 14,703
Tax-Related Receivables 830 907
Prepaid Items 1,381 1,037
Trade and Other Receivables 18,145 16,647
The Tax-Related Receivables relates to a VAT claim in Indonesia. The Group expects to
receivetheclaiminfullinthenextnancialyear.TheagingspecicationofTradeDebtors
is shown in the table below.
March 31, 2022 March 31, 2021
Not yet due 14,665 13,589
Overdue 0-30 days 994 940
Overdue 31-60 days 238 84
Overdue 61-365 days (16) 38
Overdue 366 days or more 53 52
Total 15,934 14,703
Trade Debtors by Currency March 31, 2022 March 31, 2021
Euro 8,371 8,121
US dollar 6,124 5,198
British pound 530 420
Other Currencies 909 964
Total 15,934 14,703
Trade and Other Receivables with less than one year to maturity are recognized initially
at fair value and subsequently at amortized cost. Additions to the Provision for Doubtful
Debts are included in the Income Statement under Other Operating Expenses.
The table below shows movements in the Provision for Doubtful Debts.
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Opening Balance (161) (191)
Additions to the Provision 27 58
Releases from the Provision – –
Write-oofTradeDebtors (26) (27)
ExchangeRateDierences 4 (1)
Closing Balance (156) (161)
The table below shows the percentages used for expected credit losses on trade
receivables.
March 31, 2022 March 31, 2021
Not overdue 0.25% 0.26%
1 – 30 days overdue 1.00% 1.00%
31 – 60 days overdue 2.50% 2.50%
91 – 365 days overdue 5.00% 5.00%
> 365 days overdue 100.00% 100.00%
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
104
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
18. CashandCashEquivalents
March 31, 2022 March 31, 2021
Bank Balances 16,955 16,633
Cash Balances 4 5
Total 16,959 16,638
The Cash and Cash Equivalents are freely available to the company. The credit risk on Cash
and Cash Equivalents is limited as the counterparties are generally banks with high credit
ratings from international credit-rating agencies.
19. ShareCapital
ISSUED SHARE CAPITAL
The registered capital of Holland Colours NV is € 6,810 divided into 3,000,000 ordinary
shares with a face value of € 2.27 per share. Of this registered total, an amount of 860,351
shares are issued and fully paid up. The total issued share capital is € 1,953. There were no
changestotheissuedcapitalineitherthe2021/2022orthe2020/2021nancialyear.
SHARE PREMIUM RESERVE
The Share Premium Reserve of € 1,219 is available for distribution to shareholders and is
unchangedrelativetothelastnancialyear.
20. OtherReserves
LEGAL RESERVE FOR FOREIGN CURRENCY TRANSLATION
TheForeignCurrencyTranslationReserverelatestoallexchange-ratedierencesthat
originatefromthetranslationofthenancialstatementsofthesubsidiarieswithafunctional
currency other than the euro. This only applies to the non-monetary accounts. These
translation results are directly allocated to Equity via Other Comprehensive Income. This
practice was initiated on April 1, 2004, in accordance with the exception allowed in IFRS 1.
LEGAL RESERVE FOR HEDGE
Hedge accounting is applied to the net investment hedge of a USD 2.5 million loan that was
redeemed as of March 2016. Hedge accounting results are included in Other Comprehensive
Income until the net investment is sold. At that time, the results are recognized in the Income
Statement. The net investment reserve is reduced by Deferred Taxes.
LEGAL RESERVE FOR INTANGIBLE ASSETS
Astatutoryreservefordevelopmentcostsisformedinthecompanynancialstatements,
althoughnotspecicallyrequiredunderIFRS.ThisstatutoryreserveisformedwithinEquity
tomaintainalignmentwithEquityinthecompanynancialstatements.Theabove-
mentioned reserves may not be distributed freely to shareholders. Negative amounts
reduce the amount available for distribution and positive amounts are non-distributable.
21. EarningsperShare
Earningspershareallocatedtoshareholders(ordinaryanddiluted)inthisnancialyear
amounted to € 11.83 (2020/2021: € 11.00). The calculation of the earnings per share at
March 31, 2022 is based on the net result attributable to shareholders of € 10,179
(2020/2021:€9,471)andtheaveragenumberofsharesissuedinthisnancialyearof
860,351. The total number of issued shares did not change compared to March 31, 2021.
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
105
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
22. Non-ControllingInterest
This concerns a non-controlling interest at March 31, 2022 of 12% in the net asset value
of PT Holco Indo Jaya (2020/2021: 12%).
23. CreditFacility
The company does not have any long-term debt positions outstanding (March 31, 2021:
also nil). Short-term funding needs are covered with access to current account credit
facilities of € 7,899 per balance sheet date (March 31, 2021: € € 7,937 ). These facilities
are provided by various international and local banks and have no expiration date. The
amount drawn was nil at the March 31 balance sheet date for both 2022 and 2021.
ThebankagreementsandcollateralprovidedinrelationtotheGroup’snancingis
limited to mortgage rights on real estate in Indonesia with a maximum value of €789
(March 31, 2021: € 724).
24. LeaseLiabilities
The Group recognized Lease Liabilities on the balance sheet. The table below shows the
movement and breakdown of Non-Current and Current Lease Liabilities.
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Opening Balance 1,599 1,444
Lease Payments (679) (660)
New Contracts 585 815
Other Adjustments (226) –
Closing Balance 1,279 1,599
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Non-Current Lease Liabilities 677 956
Current Lease Liabilities 601 643
Total 1,279 1,599
Maturityanalysis–contractualundiscountedcashows:
March 31, 2022 March 31, 2021
Less than 1 year 640 75
Between 1 and 5 years 679 1,618
Longer than 5 years 2 –
Total 1,321 1,693
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
106
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
25. EmployeeBenetObligations
PRE-PENSION PLAN IN THE NETHERLANDS
The pre-pension plan in the Netherlands relates to the obligation to issue a conditional
annual payment.
AsexplainedinNote3,theoriginallyagreedconditionalnancingofpastserviceyearsinthe
pre-pension plan has been converted into an equivalent annual payment. This is also
conditional. At March 31, 2022, the resulting liability amounted to € 236. On March 31, 2021,
the liability was € 299.
LEGAL LIABILITY ON TERMINATION OF EMPLOYMENT – INDONESIA
This mainly relates to the legal liability to make a payout should the employment of
Indonesian personnel be terminated. As of the reporting date, the primary actuarial
assumptions were:
March 31, 2022 March 31, 2021
Discount Rate 6.8% 7.0%
Expected Return Fund Capital Expenditures 6.8% 7.0%
Future Salary Increases 6.0% 6.0%
Average Remaining Period of Employment 7.20 8.00
Assumptions relating to future mortality rates are based on published statistical data and
mortality tables. The mortality table used is the TMI 2011 (2020/2021: TMI 2011) table with
a correction factor varying for age and gender. The total expected long-term Return on
Investment amounts to 6.8 % (March 31, 2021: 7.0%).
OTHER EMPLOYEE BENEFITS
TheOtherEmployeeBenetsitemalsoincludesaprovisionforfuturejubileepaymentsof
€ 332 (March 31, 2021: € 285) and other future payments of € 57 (March 31, 2021: € 11).
MovementsintheEmployeeBenetObligationsareshowninthetablebelow.
Pre-
pension
Plan the
Netherlands
Statutory
Termination
Employment
Plan
Indonesia
Other
Employee
Benets Total
As at March 31, 2020 392 537 292 1,221
Additions – 102 2 104
Withdrawals/Releases (93) (24) – (117)
ExchangeRateDierences – (32) 1 (31)
As at March 31, 2021 299 583 295 1,177
Additions – 200 134 324
Withdrawals/Releases (63) (223) (39) (325)
ExchangeRateDierences – 9 – 9
As at March 31, 2022 236 569 389 1.194
Of this total, the following amounts have been accounted for under current liabilities:
Pre-
pension
Plan the
Netherlands
Statutory
Termination
Employment
Plan
Indonesia
Other
Employee
Benets Total
As at March 31, 2022 39 – 49 88
As at March 31, 2021 21 – 63 84
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
107
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
26. TradeandOtherLiabilities
March 31, 2022 March 31, 2021
Trade Creditors 10,458 7,739
Payables Regarding Other Taxes 371 505
Other Liabilities and Accruals 6,563 5,371
Trade and Other Liabilities 17,392 13,615
The Payables regarding Other Taxes relates mainly to sales tax.
TheOtherLiabilitiesandAccrualsalsoincludesaprotsharetobepaidtoemployees
of € 2,225 (March 31, 2021: € 2,048).
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
108
27. ContingentAssetsandLiabilities
CAPITAL COMMITMENTS
The Group had entered into capital commitments regarding Property, Plant and
Equipment as at balance sheet date of € 2,089 (March 31, 2021: € 1,025).
PURCHASE CONTRACTS
The total commitment resulting from raw material purchase contracts was € 4,820
(March 31, 2021: € 2,977).
28. RelatedParties
IDENTITY OF RELATED PARTIES
The related parties can be divided into the relations between the Group and its subsidiary
companies, the members of the Board of Management, Supervisory Board and the holding
company Holland Pigments BV.
REMUNERATION OF KEY OFFICERS OF THE GROUP
ThekeyocersarethemembersoftheBoardofManagement.
REMUNERATION POLICY
The remuneration policy for the Board of Management, which consists of the Chief
ExecutiveOcer,ChiefFinancialOcerandChiefTechnologyOcer,issetbythe
Supervisory Board. A separate Remuneration Committee is in place. Holland Colours
strives to pay remuneration in line with the market for a company of its size, and in
proportiontoitsoverallsalarystructure.Theremunerationpackageconsistsofaxed
elementandavariableelement.Fixedsalariesareadjustedannuallyinlinewithination.
The variable payment for the Board of Management consists of a bonus plan based on
achievingnancialandnon-nancialtargets.Thebonusisuptothreetimesthemonthly
salary in the event that 100% of the targets are achieved. The Board of Management also
participatesintheprot-sharingplan,underwhichHollandColourspaysupto1.5months’
salary.FortheBoardofManagement,theprot-sharingplandependsontheROIrealized
by Holland Colours whereby 75% of this part of the bonus is paid in shares of Holland
Pigments.Basedontheresultsforthe2021/2022nancialyear,theBoardofManagement
will receive such a payment. For 2021/2022, the Board of Management partly achieved
the bonus targets. An accrual for payout has been made.
Thecompanydoesnotoeranoptionplan.
The Group does not provide any personal loans, guarantees or advance payments to
the members of the Board of Management or the Supervisory Board.
ThecontractswiththeChiefExecutiveOcer,theChiefFinancialOcerandtheChief
TechnologyOcerspecifyatermofappointmentoffouryearsandaseverancepayment
which is in accordance with the recommendations of the Dutch Corporate Governance
Code.
OTHER DISCLOSURES
IN THOUSANDS OF EUROS, UNLESS STATED OTHERWISE
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
109
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
The breakdown of the remuneration for the Board of Management and Supervisory Board
is listed in the table below.
Board of Management Coen Vinke Tanja van Dinteren Eelco van Hamersveld Total
2021/2022 2020/2021 2021/2022 2020/2021
1
2021/2022 2020/2021 2021/2022 2020/2021
Fixed Salary 334 329 200 162 193 190 727 681
Pension Expenses 27 26 17 10 20 20 64 56
Variable Element 92 99 44 56 77 53 213 208
Non-Recurring Payment – – 96 – – – – –
453 454 357 228 290 263 1,100 945
Transactions with Key Ocers
Otherthantheregularremuneration,notransactionswithkeyocerstookplaceduring
thenancialyear.
Other Interests of Members of the Board of Management
Notransactionswereeectuatedduringthenancialyearwithpartiesinwhichanyof
the Supervisory Board Members, Members of the Board of Management or their partners
have an interest.
Supervisory Board 2021/2022 2020/2021
Roland Zoomers 38 38
Gert-Hein de Heer 26 26
Aukje Doornbos 26 26
Jorrit Klaus 26 26
Total 116 116
The Annual General Meeting of Shareholders determines the remuneration of
theSupervisoryBoardMembers.Thexedremunerationisintendedtobeinlinewith
the market given the size of the company.
Holland Pigments BV
At the balance sheet date, the Dutch based investment company Holland Pigments BV
held 434,644 (March 31, 2021: 434,054) shares in Holland Colours NV.
Within Holland Pigments BV, employees collectively held approximately 25% of the shares
of Holland Pigments BV.
The costs incurred by Holland Pigments BV in connection to activities relating to
the employee participation are partly reimbursed by Holland Colours NV, please refer
to page 70 for a further description of the activities of Holland Pigments. An amount of
€98wasaccordinglypaidtoHollandPigmentsBVinthe2020/2021nancialyear
(2020/2021: € 91).
At the balance sheet date, there was no outstanding material position with
Holland Pigments BV. Receivables from and payables to Holland Pigments BV are not
covered by commercial collateral, are non-interest-bearing and are settled in cash.
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
110
1
Included for 10 months.
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
29. OtherDisclosures
PROFIT-SHARING PLAN
HollandColoursGroupoperatesaprot-sharingplanforitsemployees.Theplanis
the same for all Group employees and may, depending on the ROI and operating result
of the division, result in a payment of up to 1.5 months’ salary. Depending on the position
of the individual employee, 25% to 75% of this payment is made in Holland Pigments BV
shares, in recognition of the employee participation model. Settlement to the employees
takesplaceafterthenancialstatementshavebeenadoptedbytheAnnualGeneral
Meeting of Shareholders of Holland Colours. The applicable shares in Holland Pigments BV
are purchased for the employee at the last calculated price of Holland Pigments BV shares.
Theremainderoftheprot-sharingpaymentispaidincashtotheemployeesby
Holland Colours NV after the relevant statutory deductions have been made.
Aprot-sharingpaymentisapplicabletotheemployeesonthebasisoftheresultsinthe
2021/2022nancialyear.
ThesharesheldbyHollandPigmentsBVinHollandColoursNVarespeciedbelow.
2021/2022 2020/2021
Number of Shares in Holland Colours NV held
by Holland Pigments BV
Situation at April 1 434,054 434,048
Purchased by Holland Pigments BV 590 6
Situation at March 31 434,644 434,054
In euros
Share Price of Holland Colours NV at
Balance Sheet Date 156.50
124.00
Value 68,021,786 53,822,696
EMPLOYEE NUMBERS
Duringthe2021/2022nancialyear,thecompanyemployedanaverageof448FTEs
(2020/2021: 436 FTEs). Of these, 128 FTEs (2020/2021: 137 FTEs) were employed in
the Netherlands.
SUBSEQUENT EVENTS
Per April 1, 2022, Gaypa Srl has sold their shares (12.1%) in PT Holco Indo Jaya to
Holland Colours NV. The estimated purchase price (consideration) of EUR 420 was based
on the net equity value of the company at balance sheet date. According to the Sales and
PurchaseAgreement,nalsettlementwillbebasedonthestatutoryaccountsofthe
company, which are expected end of June 2022. Given the timing and circumstances,
the initial accounting for business combinations has not been completed. No material
goodwill or bad will is expected from this acquisition.
Initial accounting for this business combination including purchase price allocation will take
placeinnancialyear2022/2023.
After Gaypa Srl has transferred its share to Holland Colours NV, the Shareholder Composition
of Holco Indo Jaya will be as follows:
•
Holland Colours NV: 63.8%
•
PT Holland Colours Asia: 36.2%
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
111
COMPANY
INCOME STATEMENT
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2022
In thousands of euros Note April 1, 2021/March 31, 2022 April 1, 2020/March 31, 2021
Management Fees 9,639 7,130
Personnel Expenses 33 (3,524) (2,859)
Amortization 35 (86) (123)
Depreciation 36/37 (182) (189)
Other Costs (3,514) (2,731)
Operating Result 2,333 1,228
Interest Income 65 93
Interest Expenses (40) (28)
Result before Tax 2,358 1,293
Income Tax 34 (553) (360)
Result Subsidiaries 38 8,373 8,538
Net Result 10,178 9,471
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
112
COMPANY
In thousands of euros Note March 31, 2022 March 31, 2021
Non-Current Assets
Intangible Assets 35 68 154
Property, Plant and Equipment 36 1,185 1,161
Right-of-Use Assets 37 223 271
Financial Non-Current Assets 38 57,692 49,834
59,168 51,420
Current Assets
Receivables from Group Companies 448 596
Other Receivables and Prepayments 172 188
Cash and Cash Equivalents 1,617 1,523
2,237 2,307
Total Assets 61,405 53,727
In thousands of euros Note March 31, 2022 March 31, 2021
Equity
Share Capital 39 1,953 1,953
Share Premium Reserve 39 1,219 1,219
Statutory Reserves 39 (18) (1,633)
Retained Earnings 39 43,998 39,248
Result for the Year 39 10,178 9,471
Total Equity 57,330 50,258
Non-Current Liabilities
Lease Liabilities 41 134 193
EmployeeBenetObligations 42 24 21
158 214
Current Liabilities
Payables to Group Companies 170 172
Lease Liabilities 41 118 147
Income Tax Liabilities 1,539 1,230
Other Liabilities and Accrued Income 2,090 1,706
3,917 3,255
Total Equity and Liabilities 61,405 53,727
BALANCE SHEET
AS OF MARCH 31, 2022
BEFORE PROPOSED PROFIT APPROPRIATION
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
113
30. GeneralInformation
ThecompanynancialstatementsarepartofthenancialstatementsofHollandColoursNV
and are prepared in accordance with the legal requirements of Title 9, Book 2 of the Dutch
Civil Code. Holland Colours NV applies the same accounting policies to the company
nancialstatementsasthoseusedintheconsolidatednancialstatements.Thisisdone
under the possibility given in Article 2:362, paragraph 8 of the Dutch Civil Code to apply.
The only exception relates to the accounting standards relating to participations in Group
companies. Investments in consolidated subsidiaries are measured at net asset value.
The2021/2022companynancialstatementswerepresentedtotheSupervisoryBoardto
beapprovedforpublicationonMay25,2022.Thenancialstatementswillbepresented
to the Annual General Meeting of Shareholders for adoption on July 7, 2022.
31. SummaryofAccountingPrinciples
Theaccountingpoliciesusedforthecompanynancialstatementsarethesameasthose
usedfortheconsolidatednancialstatements.Unlessotherstandardsarestated,
thereaderisreferredtothestandardsstatedintheconsolidatednancialstatements.
32. Subsidiaries
INVESTMENTS IN SUBSIDIARIES
Investments in subsidiaries and other companies over which the company has a
controlling interest or exercises central management are measured at net asset value.
The net asset value is based on the measurement of assets, provisions and liabilities,
andthedeterminationofnetprotinaccordancewiththeaccountingpoliciesusedin
theconsolidatednancialstatements.
33. PersonnelExpenses
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Wages and Salaries (3,115) (2,536)
Social Security (200) (161)
Pension Costs (209) (162)
Total Personnel Expenses (3,524) (2,859)
Theaveragenumberofemployeesinthecompanyinthisnancialyearwas19FTEs
(2020/2021: 15 FTEs). For an explanation of the remuneration of management, please
refertoNote28,RelatedParties,oftheconsolidatednancialstatements.
34. IncomeTax
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Current Tax
Current Year (594) (511)
Prior Years (72) (14)
Deferred Tax 113 165
Total Income Tax (553) (360)
NOTES TO THE COMPANY FINANCIAL STATEMENTS
IN THOUSANDS OF EUROS, UNLESS STATED OTHERWISE
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
114
NOTES TO THE COMPANY FINANCIAL STATEMENTS
35. IntangibleAssets
Development
Costs Other
Assets under
Construction Total
As at March 31, 2020
Cost 1,922 93 28 2,043
Accumulated Amortization (1,696) (70) – (1,766)
Carrying Amount 226 23 28 277
Change in Asset Value
Capital Expenditures – – – –
Carrying Amount of Disposed Assets – – – –
Amortization of Disposed Assets
Amortization (107) (16) – (123)
Balance (107) 12 (28) (123)
As at March 31, 2021
Cost 1,922 121 – 2,043
Accumulated Amortization (1,803) (86) – (1,889)
Carrying Amount 119 35 – 154
Change in Asset Value
Capital Expenditures – – – –
Transfer – – – –
Amortization (71) (15) – (86)
Balance (71) (15) – (86)
As at March 31, 2022
Cost 1,922 121 – 2,043
Accumulated Amortization (1,874) (101) – (1,975)
Carrying Amount 48 20 – 68
The company’s total expenses for research and
developmentwere€1,542inthenancialyear
(2020/2021: € 1,734). Of this amount nil (2020/2021: nil)
is capitalized, whereas the remainder is reported under
Other Income and Expenses after Tax in the company
nancialstatements.
The costs of Amortization and Impairments of € 86
(2020/2021: € 123) are included in the Amortization
iteminthecompanynancialstatements.
The Other Intangible Assets consist of the costs of
computer software and licenses, and the external costs
related to their implementation and commissioning.
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
115
NOTES TO THE COMPANY FINANCIAL STATEMENTS
36.
Property, Plant and Equipment
Land and
Buildings
Machinery and
Equipment
Other
Capital Assets
Assets under
Construction Total
As at March 31, 2020
Cost
3,102 206 269 32 3,609
Accumulated Depreciation
(2,024) (130) (213) – (2,367)
Carrying Amount
1,078 76 56 32 1,242
Change in Asset Value
Capital Expenditures
– – – 1 1
Transfer Assets under Construction
32 – – (32) –
Carrying Amount of Disposals
– – – – –
Transfer Cost between Categories
206 (206) – – –
Transfer Accumulated Depreciation
between Categories
(130) 130 – – –
Depreciation
(42) – (40) – (82)
Balance
66 (76) (40) (31) (81)
As at March 31, 2021
Cost
3,340 – 269 1 3,610
Accumulated Depreciation
(2,196) – (253) – (2,449)
Carrying Amount
1,144 – 16 1 1,161
Change in Asset Value
Capital Expenditures
– – – 74 74
Transfer Assets under Construction
74 – – (74) –
Depreciation
(44) – (6) – (50)
Balance
30 – (6) – 24
As at March 31, 2022
Cost
3,414 – 269 1 3,684
Accumulated Depreciation
(2,240) – (259) – (2,499)
Carrying Amount
1,174 – 10 1 1,185
The costs of Depreciation and Impairments of € 50
(2020/2021: € 82) are included in the Depreciation item
inthecompanynancialstatements.
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
116
NOTES TO THE COMPANY FINANCIAL STATEMENTS
37. Right-of-UseAssets
The table below shows the movement of Right-of-Use Assets. These assets consist of
capitalized lease contracts.
Vehicles Total
As at April 1, 2020 194 194
Change in Asset Value
New Contracts 184 184
Depreciation (107) (107)
Balance 77 77
As at March 31, 2021
Carrying Amount 271 271
Change in Asset Value
New Contracts 83 83
Depreciation (131) (131)
Balance (48) (48)
As at March 31, 2022
Carrying Amount 223 223
38. FinancialNon-CurrentAssets
TheFinancialNon-CurrentAssetscanbespeciedasfollows:
March 31, 2022 March 31, 2021
Investments in Subsidiaries 50,280 42,329
Loans to Group companies and Deferred Tax Assets 7,412 7,505
Financial Non-Current Assets 57,692 49,834
The table below shows movements in the investments in subsidiaries.
April 1, 2021/
March 31, 2022
April 1, 2020/
March 31, 2021
Opening Balance 42,329 38,221
Movements:
•
Result from Subsidiaries 8,373 8,538
•
Change in Equity – (8)
•
Dividends Declared (1,692) (2,288)
•
Currency Translations 1,270 (2,134)
Closing Balance 50,280 42,329
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
117
NOTES TO THE COMPANY FINANCIAL STATEMENTS
Movements in the Loans to Group companies and Deferred Tax Assets are shown below.
Deferred
Tax
Assets
Loans to
Group
companies Total
As at March 31, 2020 740 – 740
Additions 75 6,950 7,025
Withdrawals – (260) (260)
As at March 31, 2021 815 6,690 7,505
Additions 20 400 420
Withdrawals (117) (396) (513)
As at March 31, 2022 718 6,694 7,412
39. Equity
ForaclaricationontheShareCapitalandSharePremium,aswellasthemovementof
the Foreign Currency Translation Reserve, Hedge Reserves and Other Reserves, please
refer to the Statement of Equity and to Notes 19 and 20 of the consolidated balance sheet,
astherearenodierencesbetweencompanyEquityandconsolidatedEquity.
PROPOSAL FOR THE APPROPRIATION OF PROFIT
In compliance with Article 21 of the Articles of Association and the Dividend Policy as
discussed in the Annual General Meeting of Shareholders of last year and set out on
page75underInvestorRelations,itisproposedtoappropriatethetotalnetprotto
theotherreserves.Theproposalforappropriationofprothasnotbeenincluded
in the balance sheet.
40. CreditFacility
The company has an available credit facility in the Netherlands of € 7,000
(March 31, 2021: € 7,000). Per end of March 2022, the company has not used
this credit facility and no collaterals have been provided.
41. LeaseLiabilities
The company recognized Lease Liabilities on the balance sheet. The table below shows
the movement and breakdown of Non-Current and Current Lease Liabilities.
April 1, 20201
March 31, 2022
April 1, 2020/
March 31, 2021
Opening Balance 340 199
Lease Payments (171) (43)
New Contracts 83 184
Closing Balance 252 340
April 1, 20201
March 31, 2022
April 1, 2020/
March 31, 2021
Non-Current Lease Liabilities 134 193
Current Lease Liabilities 118 147
Total 252 340
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FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
118
NOTES TO THE COMPANY FINANCIAL STATEMENTS
Maturityanalysis–contractualundiscountedcashows:
March 31, 2022 March 31, 2021
Less than 1 year 122 19
Between 1 and 5 years 140 330
Longer than 5 years – –
Total 262 349
42. EmployeeBenetObligations
Thisemployeebenetprovisionrelatestotheobligationtoissueaconditionalannual
payment.
TheliabilitiesregardingemployeebenetsalsoincludetheitemOtherEmployeeBenets.
This relates to a provision for future jubilee payments of € 11 (March 31, 2021: € 12).
MovementsintheEmployeeBenetObligationswereasfollows:
Pre-pension
Plan
the Netherlands
Other
Employee
Benets Total
As at March 31, 2020 73 7 80
Additions – 9 9
Withdrawals (43) (4) (47)
As at March 31, 2021 30 12 42
Additions 14 5 19
Withdrawals (11) (6) (17)
As at March 31, 2022 33 11 44
The following amounts have been accounted for as current under Other Liabilities and
Accrued Income:
Pre-pension
Plan the
Netherlands
Other
Employee
Benets Total
As at March 31, 2022 19 5 24
As at March 31, 2021 16 5 21
43. AuditFees
The fees listed below relate to the procedures applied to the company and its
consolidated group entities by the independent auditor, PricewaterhouseCoopers, as
referred to in Section 1, subsection 1 of the Audit Firms Supervision Act (‘Wet toezicht
accountantsorganisaties-Wta’)foreign-basednetwerkrms,includingtheirtaxservices
and advisory groups.
2021/2022 2020/2021
Audit of the Financial Statements 416 292
Other Audit Services – –
Tax Services – –
Other Non-Audit Services – –
Audit Fees 416 292
The total costs of PricewaterhouseCoopers Accountants NV for their procedures in the
Netherlands amount to € 271 (previous year: € 208). The remaining € 145 (previous year:
€ 84) were charged to the company by other PwC network entities.
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HOLLAND COLOURS ANNUAL REPORT 2021/2022
119
NOTES TO THE COMPANY FINANCIAL STATEMENTS
44. OtherDisclosures
WRITTEN GUARANTEE
Holland Colours NV has given a guarantee for its subsidiary Holland Colours Europe BV in
accordance with Section 403, Title 9, Book 2 of the Dutch Civil Code, and according to
Section 479A of the Companies Act on behalf of its subsidiary Holland Colours UK Ltd.
Holland Colours NV has not issued any other written guarantee as security for the
payment obligations of foreign companies.
FISCAL UNITY
The company forms a tax unity together with Holland Colours Europe BV with regard to
income tax and sales tax. Both the company and its subsidiary are jointly and severally
liable for tax payable by all companies that are part of the tax entity.
SUBSEQUENT EVENTS
Per April 1, 2022, Gaypa Srl has sold their shares (12.1%) in PT Holco Indo Jaya to Holland
Colours NV. The estimated purchase price (consideration) of € 420 was based on the net
equity value of the company at balance sheet date. According to the Sales and Purchase
Agreement,nalsettlementwillbebasedonthestatutoryaccountsofthecompany,which
are expected in end of June 2022. Given the timing and circumstances, the initial
accounting for business combinations has not been completed. No material goodwill or
bad will is expected from this acquisition.
Initial accounting for this business combination including purchase price allocation will take
placeinnancialyear2022/2023.
After Gaypa Srl has transferred its share to Holland Colours NV, the Shareholder
Composition of Holco Indo Jaya will be as follows:
•
Holland Colours NV: 63.8 %
•
PT Holland Colours Asia: 36.2 %
Apeldoorn, May 25, 2022
Board of Management Supervisory Board
Coen Vinke Roland Zoomers
Eelco van Hamersveld Gert-Hein de Heer
Aukje Doornbos
Jorrit Klaus
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Statutory Provisions regarding the Appropriation
ofProts
REGARDING THE APPROPRIATION OF PROFITS, THE ARTICLES OF ASSOCIATION
STATE THE FOLLOWING:
Article 21
Fromtheprotestablishedintheapprovednancialstatements,reservesareformedas
determined by the Board of Management with the approval of the Supervisory Board.
Theprotremainingafterthetransfertothereservesanddistributionasstatedin
paragraph 1 is at the disposal of the Annual General Meeting of Shareholders, with due
regard to the provisions of Section 105, Book 2 of the Dutch Civil Code.
The Board of Management, with the approval of the Supervisory Board, is authorized to
decide on the distribution of an interim dividend with due regard to the provisions of
Article 105 Book 2 of the Dutch Civil Code. The dividend will be made payable within one
month after it has been set, in the manner and at the place determined by the Board of
Management.Claimsforprotdistributionexpireafteraperiodofveyearsfromthedate
on which the dividends were made payable.
A resolution regarding the disposal of any reserve may be adopted by the Annual General
Meeting of Shareholders with due regard to the legal and statutory provisions.
OTHER INFORMATION
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121
HOLLAND COLOURS ANNUAL REPORT 2021/2022
121
Independent Auditor’s Report
To: the general meeting and the supervisory board of
Holland Colours N.V.
REPORT ON THE FINANCIAL STATEMENTS
2021/2022
Our opinion
In our opinion:
•
theconsolidatednancialstatementsofHolland
Colours N.V. together with its subsidiaries (‘the Group’)
giveatrueandfairviewofthenancialpositionofthe
Group as at 31 March 2022 and of its result and cash
owsfortheyearthenendedinaccordancewith
International Financial Reporting Standards as adopted
by the European Union (‘EU-IFRS’) and with Part 9 of
Book 2 of the Dutch Civil Code;
•
thecompanynancialstatementsofHollandColours
N.V. (‘the Company’) give a true and fair view of the
nancialpositionoftheCompanyasat31March2022
and of its result for the year then ended in accordance
with Part 9 of Book 2 of the Dutch Civil Code.
What we have audited
Wehaveauditedtheaccompanyingnancialstatements
2021/2022 of Holland Colours N.V., Apeldoorn. The
nancialstatementsincludetheconsolidatednancial
statementsoftheGroupandthecompanynancial
statements.
Theconsolidatednancialstatementscomprise:
•
the consolidated balance sheet as at March 31, 2022;
•
thefollowingstatementsfornancialyearended
March 31, 2022: the consolidated income statement,
the consolidated statement of comprehensive income,
the consolidated statement of changes in equity, the
consolidatedcashowstatement;and
•
thenotestotheconsolidatednancialstatements,
comprisingsignicantaccountingpoliciesandother
explanatory information.
Thecompanynancialstatementscomprise:
•
the company balance sheet as at March 31, 2022;
•
thecompanyincomestatementforthenancialyear
ended March 31, 2022;
•
thenotestothecompanynancialstatements,
comprising the accounting policies applied and other
explanatory information.
Thenancialreportingframeworkappliedinthe
preparationofthenancialstatementsisEU-IFRSandthe
relevant provisions of Part 9 of Book 2 of the Dutch Civil
CodefortheconsolidatednancialstatementsandPart9
of Book 2 of the Dutch Civil Code for the company
nancialstatements.
The basis for our opinion
We conducted our audit in accordance with Dutch law,
including the Dutch Standards on Auditing. We have
further described our responsibilities under those
standards in the section ‘Our responsibilities for the audit
ofthenancialstatements’ofourreport.
We believe that the audit evidence we have obtained is
sucientandappropriatetoprovideabasisforour
opinion.
Independence
We are independent of Holland Colours N.V. in accordance
withtheEuropeanUnionRegulationonspecic
requirements regarding statutory audit of public-interest
entities, the ‘Wet toezicht accountantsorganisaties’ (Wta,
Auditrmssupervisionact),the‘Verordeninginzakede
onafhankelijkheid van accountants bij assurance-
opdrachten’ (ViO, Code of Ethics for Professional
Accountants, a regulation with respect to independence)
and other relevant independence regulations in the
Netherlands. Furthermore, we have complied with the
‘Verordening gedrags- en beroepsregels accountants’
(VGBA, Dutch Code of Ethics).
Our audit approach
We designed our audit procedures in the context of our
auditofthenancialstatementsasawhole.Ourcomments
and observations regarding individual key audit matters,
our audit approach regarding fraud risks and our audit
approach regarding going concern should be read in this
context and not as a separate opinion or conclusion on
these matters.
Overview and context
Holland Colours N.V. manufactures, distributes, and sells
solid and liquid colour and additive concentrates. The
Group is comprised of several components and we
considered the scope and approach of our audit as set out
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HOLLAND COLOURS ANNUAL REPORT 2021/2022
122
in the section ‘The scope of our Group audit.’ We paid
specicattentiontotheareasoffocusdrivenbythe
operations of the Group, as set out below.
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
nancialstatements.Inparticular,weconsideredwherethe
Board of Management made important judgements, for
example,inrespectofsignicantaccountingestimatesthat
involved making assumptions and considering future events
that are inherently uncertain. In these considerations, we
paid attention to, amongst others, the assumptions
underlying the physical and transition climate-related risks.
Innote3ofthenancialstatements,theCompany
describes the areas of judgement in applying accounting
policies and the key sources of estimation uncertainty.
Given the estimation uncertainty, magnitude and the
related inherent risks of material misstatement in the
valuation of inventory, we considered this to be a key audit
matter as set out in the section ‘Key audit matters’ of this
report.Furthermore,weidentiedrevenuerecognitionas
a key audit matter because of the various price agreements
and terms and conditions for delivery of the product to
customers.
HollandColoursN.V.assessedthepossibleeectsof
climatechangeonitsnancialposition,refertoannual
report section ‘Corporate Social Responsibility’ (page 65-73)
and ‘Risk Management’ (page 39). We discussed Holland
Colours N.V.’s assessment and governance thereof with the
Board of Management and evaluated the potential impact
onthenancialpositionincludingunderlyingassumptions
and estimates.
Management also assessed the impact of the armed
conictinUkraineonitsnancialposition.Inthereportof
theBoardofManagement,managementreectsonthe
risks and continues to monitor sanctions and the impact
on the business. We discussed Holland Colours N.V.’s
assessment, including underlying assumptions and
estimates, with management and evaluated the potential
impactonthenancialposition.Thepossibleimpactof
sanctions is not considered to impact the key audit matters
in 2021/2022.
We ensured that the audit teams at both Group and
component level included the appropriate skills and
competences that are needed for the audit of an
international manufacturing company. To increase the
quality of the audit, we also included IT specialists in our
team,who,workingcentrally,performedspeciedaudit
proceduresonITandreportedthendingstothe
component teams.
The outline of our audit approach was as follows:
Materiality
Audit scope
Key audit
matters
Materiality
•
Overall materiality: € 1,000,000
Audit scope
•
TheGroupconsistsofthreesignicantcomponents:HollandColoursEuropeB.V.,Holland
ColoursAmericasInc,andPTHollandColoursAsiainIndonesia,andsixothernon-signicant
components.
•
AttheheadoceinApeldoorn,theNetherlands,thePwCgroupengagementteamaudited
Holland Colours N.V. and Holland Colours Europe B.V., and instructed the component auditors
inIndonesiaandtheUSAtoperformanauditonthecompletesetofnancialinformation.
•
The PwC group engagement team instructed the component auditor in Hungary to perform
speciedauditproceduresforgrouppurposes.Thisconsistedofattendinginventorycounts
in Hungary.
•
Audit coverage: 90% of consolidated revenue, 92% of consolidated total assets and 90%
ofconsolidatedprotbeforeincometax.
Key audit matters
•
Revenue recognition
•
Assumptions in the valuation of inventory
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Materiality
Thescopeofourauditwasinuencedbytheapplication
of materiality, which is further explained in the section
‘Ourresponsibilitiesfortheauditofthenancial
statements’.
Based on our professional judgement we determined
certain quantitative thresholds for materiality, including
theoverallmaterialityforthenancialstatementsasa
whole as set out in the table below. These, together with
qualitative considerations, helped us to determine the
nature, timing and extent of our audit procedures on the
individualnancialstatementlineitemsanddisclosures
andtoevaluatetheeectofidentiedmisstatements,
bothindividuallyandinaggregate,onthenancial
statements as a whole and on our opinion.
OTHER INFORMATION
Overall group materiality € 1,000,000 (2020/2021: € 800,000).
Basis for determining
materiality
We used our professional judgement to determine overall materiality. As a basis for
our judgement, we used 0.9% of net revenue from continuing operations rounded to
€ 1,000,000.
Rationale for benchmark
applied
We used revenue as the primary benchmark, a generally accepted auditing practice,
basedonouranalysisofthecommoninformationneedsoftheusersofthenancial
statements. From a stakeholder’s perspective, the long-term horizon and sustainable
growtharereectedthroughtheconsiderationofrevenue.TheGrouphasastrategic
focus on extending global market positions and the focus on revenue therefore makes
revenueinitselfanimportantmetricforthenancialperformanceoftheGroup.
Component materiality Based on our judgement, we allocate materiality to each component in our audit scope.
The materiality allocated to the components is lower than our overall Group materiality.
The range of materiality allocated across components was between € 480,000 and
€ 999,000.
We also take misstatements and/or possible misstatements
into account which, in our judgement,
are material for qualitative reasons.
We agreed with the Supervisory Board that we would
reporttothemanymisstatementidentiedduringour
audit above € 50,000 (2020/2021: € 40,000) as well as
misstatements below that amount that, in our view,
warranted reporting for qualitative reasons.
The scope of our Group audit
Holland Colours N.V. is the parent company of a group of
entities.Thenancialinformationofthisgroupisincluded
intheconsolidatednancialstatementsofHolland
Colours N.V.
We tailored the scope of our audit to ensure that we, in
aggregate,providesucientcoverageofthenancial
statements for us to be able to give an opinion on the
nancialstatementsasawhole,takingintoaccountthe
management structure of the Group, the nature of
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operations of its components, the accounting processes
and controls, and the markets in which the components of
the Group operate. In establishing the overall Group audit
strategy and plan, we determined the type of work
required to be performed at component level by the
Group engagement team and by each component auditor.
Theauditprimarilyfocusedonthesignicantcomponents
of the Group: Holland Colours N.V. (company only),
Holland Colours Europe B.V., Holland Colours Americas
Inc.,andPTHollandColoursAsia.Duetotheirsignicance
withintheGroup,anauditofthecompletesetofnancial
information was performed on these components.
In total, in performing these procedures, we achieved the
followingcoverageonthenanciallineitems:
Revenue 90%
Total assets 92%
Prot before tax 90%
For those remaining components we performed, among
other things, analytical procedures to corroborate our
assessmentthattherewerenosignicantrisksofmaterial
misstatements within those components.
The Group engagement team performed the audit work
for Group entities Holland Colours N.V. and Holland
Colours Europe B.V. For the components Holland Colours
Americas Inc. and PT Holland Colours Asia, as well as for
the stock count procedures relating to the inventory of
Holland Colours Europe B.V. in Hungary, we used
component auditors from the PwC network. These
auditors are familiar with the local laws and regulations
required to perform this audit work.
Where component auditors performed the audit, we
determined the level of involvement we needed to have
in their work to be able to conclude whether we had
obtainedsucientandappropriateauditevidenceas
abasisforouropinionontheconsolidatednancial
statements as a whole.
We issued instructions to the component audit teams
in our audit scope. These instructions included, amongst
others, our risk analysis, materiality, and the scope of the
work. We explained to the component audit teams the
structure of the Group, the main developments that were
relevantforthecomponentauditors,therisksidentied,
the materiality levels to be applied, and our global audit
approach. We held individual calls with each of the
in-scope component audit teams both during the year
and upon conclusion of their work. During these calls, we
discussedanysignicantaccountingandauditissues
identiedbythecomponentauditors,theirreports,the
ndingsoftheirproceduresandothermattersthatcould
beofrelevancefortheconsolidatednancialstatements.
The Group engagement team performed the audit work
ontheconsolidation,nancialstatementpreparation
(including disclosures) and a number of more complex
items. These included lease accounting and the going
concern analysis. The group engagement team held virtual
meetings with the component audit teams instead of
physical visits due to COVID-19 related travel restrictions.
For these virtual meetings more time was taken and we
remotely reviewed selected working papers of the
respectivecomponentauditorsandsucientinvolvement
was achieved. The group engagement team perform the
audit for the entities Holland Colours N.V. and Holland
Colours Europe B.V. on site and held regular meetings
with Group management.
By performing the procedures outlined above at the
components, combined with additional procedures
exercised at Group level, we have been able to obtain
sucientandappropriateauditevidenceontheGroup’s
nancialinformation,asawhole,toprovideabasisfor
ouropiniononthenancialstatements.
Audit approach fraud risks
Weidentiedandassessedtherisksofmaterial
misstatementsofthenancialstatementsduetofraud.
During our audit we obtained an understanding of the
Group and its environment and the components of the
internal control system. This included management’s risk
assessment process, management’s process for
responding to the risks of fraud and monitoring the
internal control system and how the Supervisory Board
OTHER INFORMATION
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HOLLAND COLOURS ANNUAL REPORT 2021/2022
125
exercised oversight. We refer to section ‘Risk Management’
in the report of the Board of Management for
management’s fraud risk assessment and section ‘Audit
Committee’ of the Supervisory Board report in which the
SupervisoryBoardreectsonthisfraudriskassessment.
We evaluated the design and relevant aspects of the
internal control system and in particular the fraud risk
assessment, as well as the code of conduct, whistleblower
procedures and incident registration. We evaluated the
design and the implementation of internal controls
designed to mitigate fraud risks and noted further
enhancement and formalisation of controls and
proceduresinthenancialyeartoamorematurelevel
appropriate for the international footprint and size of the
Group. We reported our observations to the Board of
Management and the persons charged with governance.
DuringthenancialyeartheBoardofManagement
was informed by the local management in Indonesia of
PT Holland Colours Asia about irregular commission
payments to employees of customers. We refer to the
section ‘Risk related events 2021/2022’ in paragraph
‘Risk management’ section in the report of the Board of
Management and the ‘Audit Committee’ section in the
report of the Supervisory Board. Furthermore, we refer
to fraud risk 3 below for our audit work and observations
regardingthisspecicfraudrisk.Aspartofourprocess
of identifying fraud risks, we, in close co-operation with
our forensic specialists, evaluated fraud risk factors and
specicfraudrisksidentiedwithrespecttonancial
reporting on fraud, misappropriation of assets and bribery
and corruption. We evaluated whether these factors
indicate that a risk of material misstatement due to fraud
is present.
Weidentiedthefollowingfraudrisksandperformedthe
followingspecicprocedures:
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HOLLAND COLOURS ANNUAL REPORT 2021/2022
126
Identied fraud risks Our audit work and observations
Fraud risk 1
Management override of controls
Management is in a unique position to perpetrate fraud because of management’s ability
tomanipulateaccountingrecordsandpreparefraudulentnancialstatementsby
overridingcontrolsthatotherwiseappeartobeoperatingeectively.
That is why, in all our audits, we pay attention to the risk of management override of
controls and in this context, we paid attention to:
•
The appropriateness of journal entries and other adjustments made in the
preparation of the financial statements.
•
Potential biases in estimates.
•
Significant transactions, if any, outside the normal course of business.
We evaluated the design of the internal control measures mitigating the risk of management
override of controls and assessed the internal controls in the processes of generating journal
entries,makingsignicantestimatesandbookingofrevenue.Wealsopaidspecicattention
that access safeguards in the IT system supports segregation of duties. We assessed whether
decienciesincontrolsmaycreateopportunitiesforfraud.
We performed journal entry testing procedures based on the following criteria: unexpected
account combinations which increases revenue or decreases costs and unexpected users.
With respect to journal entries, we also tested transactions outside of the ordinary course
of business. In addition, we tested manual consolidation adjustments. With regard to
management’s accounting estimates, we evaluated key estimates and judgements for bias,
including retrospective reviews of prior year’s estimates. We performed substantive audit
proceduresforsignicantestimatessuchasvaluationofinventoryaswellasfornon-
signicantestimates.
We incorporated elements of unpredictability in our audit. We performed procedures related
toagentsforthenon-signicantcomponentMexico.
Ourauditproceduresdidnotleadtospecicindicationsoffraudorsuspicionsoffraud
except for the matter described under fraud risk 3.
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Identied fraud risks Our audit work and observations
Fraud risk 2
The risk of fraudulent nancial reporting due to overstating revenue
Given the listed status of Holland Colours N.V., its objective is to meet certain market and
shareholder expectations, management bonuses and financial targets for management
and based on a presumption that there are risks of fraud in revenue recognition, revenue
recognition was subject to the risk of a material misstatement due to fraud.
Above matters could lead to pressure on management to overstate revenue by recognising
fictitious revenue transactions, affecting the assertion existence/occurrence.
In addition to the audit procedures and observations mentioned at the key audit matter
‘Revenue recognition’ we performed the following procedures on the risk of overstating
revenue by recognising ctitious revenue transactions, aecting the assertion existence/
occurrence:
•
We evaluated the design and implementation of the internal control system in the
processes related to revenue reporting.
•
We selected journal entries and consolidation entries based on risk criteria and
performed substantive audit procedures in which we also paid attention to significant
transactions outside the normal course of business. No such transactions were
identified.
•
We performed audit procedures on credit invoices after year end and on credit invoices
during 2021/2022.
•
We performed substantive audit procedures to establish the accuracy and the
occurence of revenue accounting. This involved reconciling a sample of invoices to order
confirmations and/or any discount agreements, shipping documents, and bank receipts.
•
For our work on the existence/occurrence of revenue transactions we leveraged upon
the related work performed for account receivable, such as the work on confirmations
obtained from debtors.
Our audit procedures did not lead to specic indications of fraud or suspicions of fraud with
respect to the existence/occurrence of the revenue reported.
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Identied fraud risks Our audit work and observations
Fraud risk 3
The risk of bribery and corruption
During 2021, the Company received indications that improper payments were made to
employees of customers in Indonesia.
As a response, the Company instructed external legal counsel to conduct an investigation
and report on this matter.
Based on the outcome of the investigation the Company prepared a remediation plan.
Together with our forensic specialists we have evaluated the investigation with a focus on:
•
the scope of the investigation;
•
the expertise and objectivity of the external legal counsel;
•
the results and conclusion of the investigation;
•
the remediation actions and plans; and
•
assessing the impact on the financial statements.
We, in conjunction with the component auditor in Indonesia, performed specic audit
procedures on the accuracy and completeness of the data used in the investigation.
We have evaluated management’s assessment of whether similar payments have occurred
in other divisions and components within the Group.
The Company has disclosed the results of the investigation in section ‘Risk related events
2021/2022’ in paragraph ‘Risk management’ section in the report of the Board of
Management and the ‘Audit Committee’ section in the report of the Supervisory Board.
We have obtained sucient appropriate audit evidence that the Company responded
appropriately to the signals of improper payments including remedial actions.
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During the audit we remained alert to other indications of
fraud. We also considered the outcome of our other audit
proceduresandevaluatedwhetheranyndingswere
indicative of fraud or non-compliance of laws and
regulations.Wheneverweidentiedanyindicationsoffraud,
we re-evaluated our fraud risk assessment and its impact on
our audit procedures.
Audit approach going concern
TheBoardofManagementpreparedthenancial
statements on the assumption that the entity is a going
concern and that it will continue its operations for the
foreseeable future. Our procedures to evaluate
management’s going concern assessment include,
amongst others:
•
Considering whether management’s going concern
assessment includes all relevant information of which
we are aware as a result of our audit and considering
whether management identified events or conditions
that may cast significant doubt on the entity’s ability to
continue as a going concern (hereafter: going concern
risks);
•
Evaluating the Company’s existing on-balance and
off-balance obligations;
•
Evaluating management’s current budget including
cash flows in comparison with last year; and
•
Performing inquiries of management as to their
knowledge of going concern risks beyond the period
of management’s assessment.
Our procedures did not result in outcomes contrary to
management’s assumptions and judgments used in the
application of the going concern assumption.
Key audit matters
Key audit matters are those matters that, in our professional
judgement,wereofmostsignicanceintheauditofthe
nancialstatements.Wehavecommunicatedthekeyaudit
matters to the Supervisory Board. The key audit matters are
notacomprehensivereectionofallmattersidentiedby
our audit and that we discussed. In this section, we
described the key audit matters and included a summary
of the audit procedures we performed on those matters.
We addressed the key audit matters in the context of our
auditofthenancialstatementsasawhole,andinforming
our opinion thereon. We do not provide separate opinions
onthesemattersoronspecicelementsofthenancial
statements. Any comment or observation we made on the
results of our procedures should be read in this context.
We have determined the matters described below to be
the key audit matters to be communicated in our report.
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Key audit matter Our audit work and observations
Revenue recognition
The accounting principles for revenue recognition are included in “Summary of accounting
principles” (note 3) in the nancial statements.
Revenueisrecognisedwhenaperformanceobligationissatisedbytransferringcontrol
over a promised good or service. A contract with a customer generally has one
performanceobligation,whichissatisedatacertainpointintime.
The Group applies price agreements per customer and various terms and conditions for
delivery of its products to customers. Given the variety in terms and conditions for delivery,
determining the timing of transfer of control of the promised goods is inherently complex
andduetothemagnitude,thenumberoftransactionsandtheclientspecicprice
agreements, this could potentially lead to materially misstated revenue. Based on the
above considerations we considered this area to be a key audit matter.
We updated our understanding of the Group’s revenue recognition policies and where
relevanttoouraudit,weassessedthedesignandeectivenessoftheinternalcontrol
measures related to revenue reporting and in the processes for generating and processing
journal entries related to the revenue.
Weevaluatedthedesignandtestedtheoperatingeectivenessofthecontrolactivitieson
the exception report to ensure the accuracy and existence of revenue recognition. In this
exception report, created by the Group, deviations between order prices and invoiced prices
andshippedquantitiesandinvoicedquantitieswereidentied,explained,andfollowedup.
We obtained the exception report and, together with IT specialists, assessed the reliability
ofthereportbyreconcilingtheexceptionreporttothenancialadministration.
We reperformed the analysis and evaluated the outcome and the follow-up by the Group.
Furthermore, we performed substantive audit procedures to establish the accuracy of
revenueaccounting.Thisinvolvedreconcilingasampleofinvoicestoorderconrmations
and/or any discount agreements, shipping documents, and bank receipts.
Withrespecttothecut-o,weobtainedtheGroup’srevenuerecognitionanalysis.Wethen
tested the mathematical accuracy and the reliability of the underlying data by reconciling the
analysis to the invoiced revenue in the last period, and the revenue adjustment to the journal
entry recorded. In addition, we tested a sample of the sales transactions in the period
immediately before and after the Company’s year end. We did this by tracing the information
relatedtothedateoftransferofcontroltoshippingdocumentsandclientspeciccontractual
terms and conditions.
The audit procedures were performed by the Group engagement team or by the component
teams in Indonesia and the USA.
Ourproceduresdidnotindicatematerialndings.
OTHER INFORMATION
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
131
Key audit matter Our audit work and observations
Assumptions in the valuation of inventory
The Board of Management’s assumptions are included in note 16 of the nancial statements
Withavalueof€20,6million(2020/2021:€12,6million),inventoryisoneofthesignicant
assets of the Group. Due to its nature, it is subject to market developments that require
management judgement. This management judgement especially relates to the valuation
ofrawmaterialsthataresubjecttoobsolescenceduetochangingrecipes,andtonished
goodsthatareproducedforspecicclients(includingthesurchargeforoverhead).Atyear
end,thisisreectedinthevaluationagainstthenetrealisablevalue,throughrecognition
of an inventory allowance of € 1 million.
Marking products as (partly) obsolescent is based on an inventory report and the
assessment whether inventory will be sold, which requires management’s judgement.
Inaccuratepricingand/orobsolescenceassessmentmay,giventhesignicantbalance
of inventory, result in the inventory being materially misstated. Therefore, we considered
this to be a key audit matter.
As part of our risk assessment procedures, we performed look-back procedures to assess the
qualityofmanagementestimates.Thisinvolvedcomparingtheactualwrite-osinthecurrent
nancialyeartotheinventoryallowanceinpreviousyears’nancialstatements.
We also performed substantive audit procedures on the calculation of the standard cost
prices against which the inventory is initially valued. This included testing a sample of
componentsinthestandardcostpriceofnishedgoodsbyreconcilingtherawmaterial
component to purchase invoices. In addition, we tested the surcharge for overhead by
performing analytical procedures. Here, we compared our expectation with the actual
surcharge for overhead included in the inventory valuation as of 31 March 2022.
Furthermore,weperformedanoverallanalysisofprice-andeciencyvariancesrecorded
duringtheyeartotesttheaccuracyofthecostingmethodusedfornishedgoods.
We tested the reliability of the inventory ageing report together with IT specialists. This report
is used by management to assess the ageing of the inventory.
We challenged the Group’s assumptions related to the valuation per ageing category based
onactualwrite-osandtheactualdevelopmentsininventoryageing.Wereviewedrevenue
on product level for negative margins, which could indicate a lower market value, and
discussed developments in the product portfolio and pricing.
Ourproceduresdidnotindicatematerialndingswithrespecttoestimatesandjudgements
in the valuation of inventory.
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
132
REPORT ON THE OTHER INFORMATION INCLUDED
IN THE ANNUAL REPORT
The annual report contains other information. This includes
all information in the annual report in addition to the
nancialstatementsandourauditor’sreportthereon.
Based on the procedures performed as set out below,
we conclude that the other information:
•
is consistent with the financial statements and does
not contain material misstatements;
•
contains all the information regarding the directors’
report and the other information that is required by
Part 9 of Book 2 and regarding the remuneration
report required by the sections 2:135b and 2:145
subsection 2 of the Dutch Civil Code.
We have read the other information. Based on our
knowledge and the understanding obtained in our audit of
thenancialstatementsorotherwise,wehaveconsidered
whether the other information contains material
misstatements.
By performing our procedures, we comply with the
requirements of Part 9 of Book 2 and section 2:135b
subsection 7 of the Dutch Civil Code and the Dutch
Standard 720. The scope of such procedures was
substantially less than the scope of those procedures
performedinourauditofthenancialstatements.
The Board of Management is responsible for the
preparation of the other information, including the directors’
report and the other information in accordance with
Part 9 of Book 2 of the Dutch Civil Code. The Board of
Management and the Supervisory Board are responsible for
ensuring that the remuneration report is drawn up and
published in accordance with sections 2:135b and 2:145
subsection 2 of the Dutch Civil Code.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS AND ESEF
Our appointment
We were appointed as auditors of Holland Colours N.V.
on 10 July 2014 by the Supervisory Board. This followed
the passing of a resolution by the shareholders at the
annual general meeting held on 10 July 2014. Our
appointment has been renewed annually by shareholders
and now represents a total period of uninterrupted
engagement of 8 years.
European Single Electronic Format (ESEF)
Holland Colours N.V. has prepared the annual report,
includingthenancialstatements,inESEF.
The requirements for this format are set out in the
Commission Delegated Regulation (EU) 2019/815 with
regard to regulatory technical standards on the
specicationofasingleelectronicreportingformat
(these requirements are hereinafter referred to as:
the RTS on ESEF).
In our opinion, the annual report prepared in XHTML
format, including the partially tagged consolidated
nancialstatementsasincludedinthereportingpackage
by Holland Colours N.V., has been prepared in all material
respects in accordance with the RTS on ESEF.
The Board of Management is responsible for preparing
theannualreport,includingthenancialstatements,in
accordance with the RTS on ESEF, whereby the Board of
Management combines the various components into a
single reporting package. Our responsibility is to obtain
reasonable assurance for our opinion whether the annual
report in this reporting package is in accordance with the
RTS on ESEF.
Our procedures, taking into account Alert 43 of the NBA
(Royal Netherlands Institute of Chartered Accountants),
included amongst others:
•
Obtaining an understanding of the entity’s financial
reporting process, including the preparation of the
reporting package.
•
Obtaining the reporting package and performing
validations to determine whether the reporting
package, containing the Inline XBRL instance document
and the XBRL extension taxonomy files, has been
prepared, in all material respects, in accordance with
the technical specifications as included in the RTS on
ESEF.
•
Examining the information related to the consolidated
financial statements in the reporting package to
determine whether all required taggings have been
applied and whether these are in accordance with
the RTS on ESEF.
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
133
No prohibited non-audit services
To the best of our knowledge and belief, we have not
provided prohibited non-audit services as referred to
inarticle5(1)oftheEuropeanRegulationonspecic
requirements regarding statutory audit of public-interest
entities.
Services rendered
In addition to the audit, we have provided no services
to the Company or its controlled entities for the period
to which our statutory audit relates.
RESPONSIBILITIES FOR THE FINANCIAL
STATEMENTS AND THE AUDIT
Responsibilities of the Board of Management and the
Supervisory Board for the nancial statements
The Board of Management is responsible for:
•
the preparation and fair presentation of the financial
statements in accordance with EU-IFRS and Part 9 of
Book 2 of the Dutch Civil Code; and for
•
such internal control as the Board of Management
determines is necessary to enable the preparation
of the financial statements that are free from material
misstatement, whether due to fraud or error.
Aspartofthepreparationofthenancialstatements,
the Board of Management is responsible for assessing
the Company’s ability to continue as a going concern.
Basedonthenancialreportingframeworksmentioned,
theBoardofManagementshouldpreparethenancial
statements using the going-concern basis of accounting
unless the Board of Management either intends to
liquidate the Company or to cease operations or has
no realistic alternative but to do so. The Board of
Managementshoulddiscloseinthenancialstatements
anyeventandcircumstancesthatmaycastsignicant
doubt on the Company’s ability to continue as a going
concern.
The Supervisory Board is responsible for overseeing the
Company’snancialreportingprocess.
Our responsibilities for the audit of the nancial
statements
Our responsibility is to plan and perform an audit
engagementinamannerthatallowsustoobtainsucient
and appropriate audit evidence to provide a basis for our
opinion. Our objectives are to obtain reasonable
assuranceaboutwhetherthenancialstatementsasa
whole are free from material misstatement, whether due
to fraud or error and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high but
not absolute level of assurance, which makes it possible
that we may not detect all material misstatements.
Misstatements may arise due to fraud or error. They are
considered material if, individually or in the aggregate,
theycouldreasonablybeexpectedtoinuencethe
economic decisions of users taken on the basis of the
nancialstatements.
Materialityaectsthenature,timingandextentofour
auditproceduresandtheevaluationoftheeectof
identiedmisstatementsonouropinion.
A more detailed description of our responsibilities is set
out in the appendix to our report.
Utrecht, 25 May 2022
PricewaterhouseCoopers Accountants N.V.
Original signed by W.F.J. Vermeulen RA
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
134
Appendix to our auditor’s report on
thenancialstatements2021/2022
of Holland Colours N.V.
In addition to what is included in our auditor’s report, we
have further set out in this appendix our responsibilities
fortheauditofthenancialstatementsandexplained
what an audit involves.
THE AUDITOR’S RESPONSIBILITIES FOR THE AUDIT
OF THE FINANCIAL STATEMENTS
We have exercised professional judgement and have
maintained professional scepticism throughout the audit
in accordance with Dutch Standards on Auditing, ethical
requirements and independence requirements. Our audit
consisted, among other things of the following:
•
Identifying and assessing the risks of material
misstatement of the financial statements, whether
due to fraud or error, designing and performing audit
procedures responsive to those risks, and obtaining
audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the intentional override of
internal control.
•
Obtaining an understanding of internal control relevant
to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness
of the Company’s internal control.
•
Evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by the Board of
Management.
•
Concluding on the appropriateness of the Board of
Management’s use of the going-concern basis of
accounting, and based on the audit evidence obtained,
concluding whether a material uncertainty exists
related to events and/or conditions that may cast
significant doubt on the Company’s ability to continue
as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in
the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date
of our auditor’s report and are made in the context
of our opinion on the financial statements as a whole.
However, future events or conditions may cause the
Company to cease to continue as a going concern.
•
Evaluating the overall presentation, structure and
content of the financial statements, including the
disclosures, and evaluating whether the financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Considering our ultimate responsibility for the opinion on
theconsolidatednancialstatements,weareresponsible
for the direction, supervision and performance of the
Group audit. In this context, we have determined the
nature and extent of the audit procedures for
components of the Group to ensure that we performed
enoughworktobeabletogiveanopiniononthenancial
statements as a whole. Determining factors are the
geographicstructureoftheGroup,thesignicanceand/or
riskproleofgroupentitiesoractivities,theaccounting
processes and controls, and the industry in which the
Group operates. On this basis, we selected group entities
forwhichanauditorreviewofnancialinformationor
specicbalanceswasconsiderednecessary.
We communicate with the Supervisory Board regarding,
among other matters, the planned scope and timing of
theauditandsignicantauditndings,includingany
signicantdecienciesininternalcontrolthatweidentify
during our audit. In this respect, we also issue an
additional report to the audit committee in accordance
witharticle11oftheEURegulationonspecic
requirements regarding statutory audit of public-interest
entities. The information included in this additional report
is consistent with our audit opinion in this auditor’s report.
We provide the Supervisory Board with a statement that
we have complied with relevant ethical requirements
regarding independence, and to communicate with them
all relationships and other matters that may reasonably
be thought to bear on our independence, and where
applicable, related actions taken to eliminate threats or
safeguards applied.
From the matters communicated with the Supervisory
Board, we determine those matters that were of most
signicanceintheauditofthenancialstatementsofthe
current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, not
communicating the matter is in the public interest.
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
135
CONTACT
HOLLAND COLOURS NV
P.O. Box 720
7300 AS Apeldoorn
T (31) 55-368 0700
E info@hollandcolours.com
Chamber of Commerce 08036180
HOLLAND COLOURS EUROPE BV
Halvemaanweg 1
7323 RW Apeldoorn
P.O. Box 720
7300 AS Apeldoorn
The Netherlands
T (31) 55-368 0700
E info@hollandcolours.com
HOLLAND COLOURS UK LTD
Unit 16/17/18, Sabre Court
Valentine Close, Gillingham Business
Park
Gillingham, Kent ME8 0RW
United Kingdom
T (44) 1634-388 727
E uk@hollandcolours.com
HOLLAND COLOURS
HUNGARIA KFT
Déri Miksa körút 2
P.O. Box 8
5000 Szolnok
Hungary
T (36) 56-420 644
E szolnok@hollandcolours.com
HOLLAND COLOURS
AMERICAS INC
1501 Progress Drive
Richmond, Indiana, 47374
USA
T (1) 765-935 0329
Toll-free (1) 800-723-0329
E richmond@hollandcolours.com
HOLLAND COLOURS CANADA INC
200 Consumers Rd, Suite 303
Toronto, Ontario M2J 4R4
Canada
T (1) 416-449 4344
Toll-free (1) 800-361 3967
E canada@hollandcolours.com
HOLLAND COLOURS
MEXICANA SA DE CV
Tezosomoc #4
(Bodega 3)
Col. Recursos Hidráulicos
Tultitlán, Edo de México
México
CP 54913
T 52 (55) 58-94-36-41
E mexico@hollandcolours.com
PT HOLLAND COLOURS
ASIA - SURABAYA
Jl. Berbek Industri II/2
(Surabaya Industrial Estate Rungkut)
Sidoarjo 61256-East Java
Indonesia
T (62) 31-849 3939
E surabaya@hollandcolours.com
Export department Surabaya:
T (62) 31-841 1 801
E exportasia@hollandcolours.com
PT HOLLAND COLOURS
ASIA – JAKARTA
Kawasan Industri dan Pergudangan
TAMAN TEKNO BSD Blok E3 no. 45
Kecamatan SETU, Tangerang Selatan,
Banten 15314-West Java
Indonesia
T (62) 21-75681088
E jakarta@hollandcolours.com
PT HOLCO INDO JAYA
Jl. Berbek Industri IV No 1
(Surabaya Industrial Estate Rungkut)
Sidoarjo 61256-East Java
Indonesia
T (62) 31-849 3939
E indojaya@hollandcolours.com
REPRESENTATIVE OFFICE CHINA
Room 908, Eco City 1788, No. 1788
West Nanjing Road, Jing’an District
Shanghai 20040
China
T (86) 13022112583
(60) 162222684
E shanghai@hollandcolours.com
FIVE-YEAR SUMMARY & INVESTOR RELATIONSSUPERVISORY BOARD REPORTCSR EMPLOYEE PARTICIPATIONREMUNERATION REPORTGOVERNANCEMANAGEMENT BOARD REPORTABOUT
INTRODUCTION BY THE CEO
FINANCIAL STATEMENTS
HOLLAND COLOURS ANNUAL REPORT 2021/2022
136
FIND OUT MORE
Contact our sales people about purchasing quantities and deliveries or our technical experts for questions
about our technology and its implementation:
AMERICAS: richmond@hollandcolours.com | +1 765-935 0329 / toll-free: +1 800 723 0329
ASIA: surabaya@hollandcolours.com | +62 31 849 3939
EMEIA: info@hollandcolours.com | +31 (0)55 36 80 700
www.hollandcolours.com